Mitsubishi, Toyota lead $147m Japanese fund for African clean energy and EV startups

Japanese companies, including Mitsubishi, Sumitomo Mitsui Banking, and Toyota Ventures, have invested in a $147 million Africa-focused venture capital fund, signalling growing interest from Asian investors in the continent’s clean technology sector.

The Novastar Ventures fund also drew backing from SBI Holdings, Mitsui OSK Lines, and the Japan International Cooperation Agency, according to partner Steve Beck.

The fund will focus primarily on green technology startups, particularly in electric mobility, renewable energy, and climate solutions.

“The Japanese investors want access to knowledge and deal flow on the continent,” Beck said in an interview with Bloomberg. “We are also giving them co-investment rights in the companies.”

Why Japanese firms are betting on African startups

Support from major Japanese companies highlights increasing Japanese interest in African businesses. This is due to a declining market and low interest rates in Japan.

Last year, more than 60 Japanese investors backed over 190 deals on the continent, spanning corporate venture arms, banks, and public agencies, according to research firm Briter.

The trend reflects Japan’s strategy of seeking growth opportunities in emerging markets with young populations and expanding digital economies.

In 2025, African venture capital firms had a slow year for fundraising, securing only $107 million, as reported by Venture Capital in Africa. Novastar’s recent successful fundraising of $147 million is notable, making it one of the largest Africa-focused funds established recently.

Urgent climate need drives investment in green technology

Nairobi-based Novastar invests largely in green technology startups because if companies only replicate the industrial strategy of the global north, “we are all cooked,” Beck said.

“If we attach some of the planet-positive technologies to the rapid growth engine in Africa, there can be an acceleration into the new economy,” he explained.

The fund has invested in several electric mobility companies. These include BasiGo, an electric bus company in Kenya, and Greenwheels, which manages Uber’s electric two-wheeler fleet. Novastar has also invested in ARC Ride, a company that provides battery swapping infrastructure for electric vehicles.

Beyond mobility, Novastar has backed Egypt’s Breadfast, which recently raised $50 million, and Nigerian online food company Chowdeck, which is electrifying its delivery fleet.

With the latest investment, Novastar will look for deals in South Africa, expanding beyond its traditional focus on East and West Africa. The move positions the fund to access one of the continent’s most mature startup ecosystems while maintaining its climate-focused investment thesis.

Other investors in the venture capital fund include British International Investment, Norfund, Swedfund, Proparco, and COFIDES, as well as private capital, Beck said.

The mix of development finance institutions and corporate investors reflects the growing recognition that climate technology in Africa requires both patient capital and strategic industry partnerships.

The investment’s focus on green technology reflects the growing global trend of investors prioritizing climate solutions.

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