The bustling energy of Johannesburg recently played host to a delegation of ambitious French entrepreneurs, eager to tap into the dynamism of the South African market. This marked the commencement of the fourth edition of the Africa Accelerator, a programme spearheaded by Bpifrance and Business France, under the banner of Team France Export. The initiative, which saw sixteen innovative French companies immerse themselves in the local ecosystem, engaging with South African startups and established corporations, hints at a broader trend: France’s deepening economic engagement with the African continent.
While these accelerator programmes provide crucial on-the-ground support and networking opportunities, the underlying engine driving much of France’s capital into the rapidly growing African tech landscape is the Averroès Fund of Funds. For over two decades, this investment vehicle, managed by Bpifrance Investissement and co-sponsored by Proparco, the private sector arm of the French Development Agency (AFD), has quietly become a significant, albeit indirect, backer of African venture capital and private equity firms.
The Averroès Fund of Funds operates as an intermediary, strategically investing in various African-based funds rather than directly into individual companies. This approach allows for a diversified exposure across the continent and across different stages of business growth, from early-stage ventures to more mature enterprises. By backing experienced local fund managers, Averroès aims to foster a robust and sustainable private equity ecosystem within Africa.
The journey began in 2003 with Averroès Finance I, which focused on building the nascent private equity market in the Maghreb region, investing in multi-sector development capital funds. This was followed in 2009 by Averroès Finance II, which expanded its geographical reach to include the Eastern Mediterranean, with investments in funds in Turkey and Lebanon, while continuing to support experienced management teams.
A significant shift occurred in 2015 with the launch of Averroès Finance III. This marked the fund’s exclusive focus on the African continent, encompassing both the Maghreb and Sub-Saharan Africa. It broadened its investment scope to include development capital, transmission capital, and notably, venture capital funds. This evolution reflected the growing maturity and diversification of the African private equity landscape.
In 2020, Bpifrance and Proparco unveiled the fourth iteration: Averroès Africa. With a target size of €100 million, this pan-African fund of funds builds upon the expertise gained from its predecessors, having already channelled approximately €1.2 billion into around 20 African private equity funds, which in turn have invested in over 150 companies across 40 African countries.
Averroès Africa will continue to target multi-sectoral private equity funds with a regional or pan-African dimension, managed by experienced local teams. However, it will place an increased emphasis on venture capital funds, acknowledging the rapid growth and potential of the continent’s tech startup scene. Notably, for the first time, Averroès Africa will also consider investing in sector-specific funds focusing on areas like financial services, health, and agribusiness, aligning with the evolving needs and opportunities within the African market.
The impact of the Averroès Fund of Funds is multi-faceted. For African private equity fund managers, it provides crucial access to capital from well-regarded public institutions like Bpifrance and Proparco, lending credibility and facilitating further fundraising from other investors. This institutional backing also promotes higher standards of governance, investment practices, and environmental, social, and governance (ESG) considerations within the African private equity landscape.
Furthermore, the Averroès programme acts as a bridge between French and African businesses. By indirectly financing a diverse portfolio of over 170 African companies, Averroès facilitates connections with French companies seeking to expand into the continent. Portfolio companies of Averroès-backed funds, include Metier, Adenia Partners, AfricInvest Group, Amethis, Investisseurs & Partenaires — I&P, SPE Capital , Mediterrania Capital Partners, Partech and BREEGA.
Nicolas Dufourcq, CEO of Bpifrance, highlighted the strategic timing of the Averroès Africa launch, hoping that the fund would contribute to addressing these issues by supporting small and medium-sized enterprises and fostering innovation.
Gregory Clemente, CEO of Proparco, echoed this sentiment, emphasizing the growing ambition of the partnership with Bpifrance. He stated that Averroès Africa aims to mobilize both public and private capital towards high-impact sectors in Africa, leveraging Proparco’s extensive experience and network on the continent.
The Averroès Fund of Funds, while operating behind the scenes, plays a vital role in nurturing the African private equity and venture capital ecosystem. By strategically deploying capital and fostering connections between French and African businesses, it contributes to sustainable economic growth, job creation, and innovation across the continent. As Averroès Africa embarks on its mission, it stands poised to further fuel the dynamism of the African tech sector and strengthen the economic ties between France and the continent.