Seedstars launched its second emerging market seed stage fund, Seedstars International Ventures II.
The firm announced the first close of the fund with $20 million committed by notable investors including the International Finance Corporation (IFC), Visa Foundation, The Rockefeller Foundation, and Symbiotics.
Since 2013, Seedstars has supported over 90 emerging market venture ecosystems, seeing firsthand how the founder talent pool has matured with 2,070 VC-backed startups in 2021 in their core markets versus just over 560 in 2017. Seedstars will leverage this progress and invest in 100 pre-seed and seed stage companies across Asia, Africa, MENA, and LATAM in the next 3 years. Investments will be focused on companies building for the future of finance, commerce, health, work and education, with follow-on investments up to Series A.
The predecessor fund invested in 81 companies in over 30 countries, with category-leading investments in all regions including Dastgyr (Pakistan, backers include Veon and SOSV), Foodics (MENA, backers include Sequoia and Prosus), MyRobin (Indonesia, backers include Accion Venture Lab and Antler), OlaClick (LATAM, backers include Meta and Google/Gradient) and Omnibiz (Nigeria, backers include Musha Ventures and LoftyInc Capital), among others.
Seedstars’ focus on supporting scalable technology companies in emerging markets, solving major societal challenges like access to finance, health, or education, and working closely with entrepreneurs to scale their businesses means that the impact thesis is embedded in the investment thesis. The fund also includes a blended finance component with a first-loss tranche that provides downside protection for investments in the lowest-income markets.
Venture capital flows in emerging markets have been growing at a 40% rate year-on-year, yet remain just 4% of global volumes. However, cash is only one of the ingredients for venture success and Seedstars distinguishes itself through its Value Creation Platform, built to help portfolio companies scale up rapidly.
The primary component of the Value Creation Platform is the Growth Track, a 3-month mentor-led sprint, where portfolio companies are equipped with the tools and methodologies to run a professional growth team. The Growth Track is led by the fund’s Growth Entrepreneur in Residence, Jon Attwell (ex-Naspers/Prosus) with support from growth practitioners with experience in high-growth firms (e.g. Careem, SkyScanner). The Value Creation Platform also provides companies with access to a vast network of 1,300 mentors, support with fundraising, a group of peers, and various other benefits.
Charlie Graham-Brown, Seedstars Partner
I have no doubt about the abundance of talented founders or the market opportunities, but the challenges can’t be ignored. Our strategy innovates on so many levels to mitigate risk, be it through our country diversification, portfolio construction strategy, value creation platform, or the blended finance structure. We have a unique recipe, an incredible team, and backers in place to build on the success of the first fund and level the playing field for tech entrepreneurs around the world.
Co-founder & CEO of Dastgyr Zohaib Ali
Seedstars is a true outlier and they have proved that ever since they invested in our pre-seed round. On fundraising, they were the most well-connected investors and helped us close the region's largest Series A. On growth, they manufactured with us an organic ordering system which made Dastgyr a cost-effective B2B marketplace.
