Japanese companies including Mitsubishi, Sumitomo Mitsui Banking and Toyota have invested in a $147 million (approximately R2.5 billion) Africa-focused venture capital fund, signalling growing interest from the Asian nation in the continent’s startups and their green technology potential.
The Novastar Ventures fund also drew investors including SBI Holdings, Mitsui OSK Lines and the Japan International Cooperation Agency, according to partner Steve Beck. According to News24 Business, the Japanese investors want access to knowledge and deal flow on the continent, with the fund also granting them co-investment rights into portfolio companies.
The backing by large Japanese firms underscores growing interest from Japan in African companies as domestic investors contend with a shrinking market at home and relatively low interest rates. According to research firm Briter , more than 60 Japanese investors backed over 190 deals on the African continent last year, spanning corporate venture arms, banks and public agencies. This represents a steady increase in Japan-Africa investment activity over the past three years, driven largely by Japanese corporations seeking diversification and growth opportunities beyond their mature home market.
The fundraising comes after a subdued year for African venture capital. According to the Venture Capital in Africa report , firms raised only $107 million (approximately R1.8 billion) in 2025, a significant decline from previous years as global investors pulled back from emerging markets due to rising interest rates and geopolitical uncertainty. The Novastar fund, at $147 million (approximately R2.5 billion), therefore represents a notable bright spot in an otherwise challenging fundraising environment for African-focused VC.
Novastar invests largely in green technology startups, according to Beck, who explained that if companies only replicate the industrial strategy of the global north, the environmental consequences would be severe. He added that by attaching planet-positive technologies to Africa’s rapid growth engine, there can be an acceleration into the new economy. This thesis aligns with Japan’s own decarbonisation goals and its interest in exporting climate technology solutions to fast-growing markets.
Nairobi-based Novastar has previously invested in electric bus company BasiGo, while it used the latest fund to back the fleet manager for Uber’s two-wheeler EV fleet, Greenwheels in Kenya, and ARC Ride, which handles battery swapping, Beck said. Novastar has also invested in Egypt’s Breadfast, which recently raised $50 million (approximately R853 million), and Nigerian online food company Chowdeck, which is electrifying its delivery fleet, according to Beck.
With the latest fund, Novastar will look for deals in South Africa, Beck confirmed. South Africa represents the continent’s most industrialised economy and has a growing clean technology sector, including electric vehicle charging infrastructure, renewable energy startups and battery storage solutions. The country has also seen increased venture capital activity in fintech and logistics, though green tech remains an emerging but promising segment.
Other investors into the new venture capital fund include British International Investment, Norfund, Swedfund, Proparco and Cofides, as well as private capital, Beck said. The presence of multiple development finance institutions suggests that the fund carries both commercial and developmental mandates, with an emphasis on climate impact alongside financial returns. The fund’s ability to attract Japanese corporate backing alongside European development finance institutions highlights the convergence of commercial and strategic interests in Africa’s green transition.