Sumitomo Mitsui Banking Corporation (SMBC) has invested in Novastar Ventures’ Africa People & Planet Fund III, strengthening the Japanese lender’s push into impact-focused investments on the continent.
The fund will support early-stage startups in sectors such as green technology, agriculture, renewable energy, mobility and financial services.
Novastar, founded in 2014, manages more than $200 million in assets with offices in Kenya, Nigeria and the UK. Its portfolio companies provide essential services while addressing structural challenges from greenhouse gas emissions to food security and soil degradation. Fund III is expected to deepen this focus by backing businesses that can scale solutions across Africa’s rapidly growing markets.
SMBC is committing capital through its Social Value Creation Investment Fund, which was launched by parent company Sumitomo Mitsui Financial Group as part of its medium-term management plan.
The fund has a budget of ¥50 billion ($340 million) for fiscal year 2025, up from ¥40 billion in 2024, reflecting Japan’s growing appetite for impact-led opportunities overseas. SMBC president and CEO Akihiro Fukutome said the initiative aligns with the bank’s mission of creating social value while expanding its international presence.
The investment adds SMBC to a coalition of global backers that have already committed to Novastar’s third fund, including European development finance institutions Swedfund, Norfund, Proparco and British International Investment, as well as Japanese shipping group Mitsui O.S.K. Lines.
Their combined support highlights the increasing role of venture capital in bridging Africa’s funding gaps and building sustainable business models.
Africa’s demographics underscore the scale of the opportunity. The continent’s population is forecast by the UN to account for a quarter of the world’s total by 2050, intensifying demand for food, energy, mobility, financial inclusion and climate resilience.
Startups have emerged as key actors in delivering these services and attracting international capital. Japan’s growing involvement, marked by SMBC’s latest move, signals a shift from traditional aid and trade ties toward venture-led partnerships that link African innovation with global capital and expertise.