For any founder navigating Africa’s funding landscape, the corporate venture capital (CVC) cheque can seem like a golden ticket. It comes not just with cash, but with the promise of a powerful strategic partner, market access, and a stamp of corporate legitimacy. But a closer look at recent deals reveals a pattern that is less about altruism and more about a very particular kind of corporate problem-solving.
It turns out the secret to unlocking CVC funding in Africa often lies in a simple strategy: build a solution for a problem the corporate already has, or one it will have tomorrow. Recent investments from the venture arms of industrial giants, FMCG players, and tech conglomerates offer a clear, if sometimes cynical, guide to how their investment decisions are really made.
Lesson 1: Help Us Modernize Our Legacy Systems
For decades, Elsewedy Electric has been a titan of Egypt’s industrial economy, a world of energy grids and infrastructure projects. Now, its investment arm, Elsewedy Capital Holding, has suddenly developed a keen interest in fintech. Its recent backing of B2B payments startup SETTLE and fleet management platform Octane is not a random foray into the tech world. It’s a textbook case of a legacy giant outsourcing its R&D.
The pitch from startups like SETTLE is compellingly simple: your enterprise payment systems are clunky and inefficient; our platform automates them. For a conglomerate with a $700m portfolio across sectors like construction and manufacturing, this isn’t just an investment; it’s a potential internal efficiency tool. Elsewedy Capital’s CEO Haitham Sabry said SETTLE “simplifies and automates critical financial workflows,” which sounds like a problem his own group has likely faced for years.
The lesson for founders? If you want to catch the eye of an industrial powerhouse, find a process they still do on spreadsheets and turn it into a SaaS platform.
Lesson 2: Build the Plumbing We Are Too Busy to Build
Global tech giants expanding into Africa face a classic dilemma: build from scratch or buy their way in. Yango Group, a UAE-headquartered ride-hailing conglomerate, appears to have chosen the latter with its new $20m Yango Ventures fund. Its first move was a strategic investment in BuuPass, a Kenyan mobility startup that has already done the gruelling work of digitising over 150 transport providers and selling 20 million tickets.
Why build a new intercity bus network when you can just back the local champion who already has? BuuPass CEO Sonia Kabra praised Yango for leaning in “with insight, not just capital” — the kind of invaluable insight, one presumes, that a multinational looking for a plug-and-play market entry can provide.
This approach focuses on funding the continent’s essential infrastructure — the digital plumbing that makes things work. Laila Hassan of Algebra Ventures, a co-investor in Octane, hit the nail on the head when she described the startup’s vision as “laying financial rails for Egypt’s logistics sector.” CVCs are proving eager to fund the companies building these rails, which their own operations will inevitably run on.
Lesson 3: Find a Corporate with a Conscience (or a Niche)
Of course, not every CVC is driven by pure operational self-interest. Some are driven by a grander, shinier mission. Take GB Hub Africa, the new $10m impact fund from GB Foods, the company behind the ubiquitous Gino and Pomo tomato paste sachets. Its mission? Nothing less than to “transform Africa’s food systems” and improve livelihoods.
Its first investment was in Ghana’s GreenHeart SE, a company that turns organic waste into biochar to fight land degradation and capture carbon. It’s a pitch that ticks every conceivable ESG box, making it irresistible for a massive FMCG player looking to bolster its sustainability credentials. For founders, the takeaway is that if your startup can help a corporate giant sleep better at night about its carbon footprint, you might just get funded.
On the other end of the spectrum is EdVentures, the venture arm of Egyptian publisher Nahdet Misr. Its investment thesis is breathtakingly simple: if it’s an EdTech startup, we’re interested. From tutoring platforms (Elkheta) to school bus logistics (Schoolz), EdVentures is methodically backing every part of the educational value chain. It’s a brilliant strategy of vertical integration disguised as venture capital.
Meanwhile, financial player Beltone Venture Capital seems to be following a radical strategy of its own: investing in good companies across multiple sectors to make money. Its recent partnership on a $30m MENA fund and investments in everything from logistics to D2C eyewear suggests a model that looks a lot like a traditional VC.
The Fine Print: Slow Decisions and Shifting Priorities
Before founders rush to pivot their pitch decks, it’s worth reading the CVC terms and conditions. The corporate embrace can be slow, and its attention span short. The African tech landscape is haunted by the ghosts of CVCs past — Naspers Foundry and the ARM Labs Accelerator are exemplary tales of corporate initiatives that wound down when priorities shifted.
As one African CVC expert put it recently, CVCs often struggle with “internal alignment issues” and “slower decision-making cycles.” Startups eager for a quick cheque may find themselves stuck in endless corporate strategy meetings.
Ultimately, the rise of the CVC offers a new, powerful path to funding for African startups. But founders would do well to understand the logic behind the money. Whether it’s solving a corporate’s nagging operational headache, helping it expand into a new market, or burnishing its ESG halo, the most successful CVC pitches are the ones that remember who they’re really pitching to.