British International Investment

Novastar Ventures

A flexible approach

We worked with this Kenya-based team to ensure our investment terms worked for the early-stage businesses they wanted to back.



Novastar Ventures is a fund manager that invests in innovative early-stage businesses that provide goods, services, and economic opportunities for low-income populations in Africa. Novastar works across sectors, including off-grid energy, agriculture, and education. We invested in Novastar’s first fund in 2014.

Pre-investment partnership

The investment was new territory for CDC, as it was the first commitment made by our Impact Fund – part of our Intermediated Equity team – which backs highly developmental investment funds.

Andrew Carruthers, one of Novastar’s two founders, appreciates that the then new team were able to be flexible in their approach: “We found the team very helpful and pragmatic. They helped us look at the fund terms and mechanisms to ensure it worked for the businesses we were investing in, even though the set up was different from the deals CDC’s investment committee was approving at the time.”

CDC’s backing also helped encourage other investors to support their first fund: “They were our anchor investor. They have built a track record of investing in sub-Saharan Africa over a long period, so it provided a strong message to the market. They also played an important role in liaising with other investors during the first and second close of the fund. In the end, we were oversubscribed,” adds Steve Beck, Novastar’s other co-founder.

Building a lasting relationship

As the fund began making investments, we worked with the team to develop the environmental, social and governance framework for the fund’s portfolio. Steve says that both he and Andrew had direct interaction with our dedicated departments. “They helped us get our ‘arms around’ the issues. They were very understanding of the types of businesses we invest in – usually start-ups – and there was a willingness to adapt their procedures to meet our needs, as well as theirs.”

According to both founders, we continue to play an active role amongst the group of limited partners (LPs) invested in the fund.

“We have good relationships with all our investors. Nevertheless, CDC tends to take a lead and steers debates among our advisory groups and other LP committees.”

Andrew Carruthers, co-founder, Novastar Ventures

Whatever the issue, Andrew adds that it’s always easy to speak to someone here: “I have been made to feel very welcome to drop in at any point. We are so focused on working on the ground, it’s helpful to speak to CDC to get an understanding of what’s going on in the wider market. This open communication means, if there is a problem, it can be dealt with up front.”

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