Seedstars lands $20M for its second seed-stage fund to invest in 100 tech startups in emerging markets

In 2013, three Swiss tech entrepreneurs decided to launch an international organization called Seedstars, a seed stage venture capital fund dedicated to global emerging and frontier markets. Fast forward about a decade later, Seedstars has invested in 90 emerging market venture ecosystems in over 30 emerging countries – from Bogota, India, to Lagos, Nigeria, and Karachi, Pakistan.

Today, Seedstars announced the launch of its second seed stage fund  Seedstars International Ventures II to invest in 100 seed-stage tech startup companies in the emerging markets. To support this fund, Seedstars said it raised $20 million from notable investors including the International Finance Corporation (IFC), Visa Foundation, The Rockefeller Foundation, and Symbiotics. The fund is expected to reach a total of $30 million.

Seedstars’ current portfolio includes 81 companies in over 30 countries, with category-leading investments in all regions including Pakistan e-commerce startup Dastgyr (backers include Veon and SOSV), Saudi Arabian cloud-based point-of-sale and restaurant management system Foodics ( backers include Sequoia and Prosus).

Others included Indonesian MyRobin (backers include Accion Venture Lab and Antler), Latin American restaurant CRM OlaClick(LATAM, backers include Meta and Google/Gradient) and Nigerian B2B marketplace Omnibiz (backers include Musha Ventures and LoftyInc Capital), among others.

Seedstars’ portfolio founders

In a statement, Patricia Sosrodjojo, partner at Seedstars, said: “I think of it as three different levels. The first one is the fact that we’re coming in very early, we’re usually one of the first institutional checks after the angels so we can help catalyze capital. The second is the countries we cover, where the ecosystems is still not that developed yet. And the third one is that we look for business models that can scale up quickly, similar to the normal VC model, but that they would be able to affect a lot of people. We align ourselves with a lot of the ESGs.”

Charlie Graham-Brown, Seedstars Partner, comments, “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.”

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.

Seedstars Partner Patricia Sosrodjojo comments, “Investing and impact don’t have to be mutually exclusive. Our strategy combines these two critical objectives in one and we believe that is what both founders and investors are searching for.”