Anava Fund of Funds is the product of a national initiative, Startup Tunisia.

Officially launched in 2021, the country’s pioneering fund of funds has transformed its startup and investment landscape. This has led to a quadrupling in the number of startups and funds targeting the country.

In this article, we examine the beginning of Startup Tunisia before closing in on ANAVA and its impact.

Starting “Startup Tunisia”

In 2015, the Minister of ICT had just finalised a framework to incentivise multinationals to set up in Tunisia. But quickly realised that there was nothing to help young companies start up. “We asked ourselves the following question: What should be done so that there is a Tunisian Unicorn after 5 years,” the Minister said in an interview.

The outcome of that session birthed “Startup Tunisia”, operated by a specialised management company called Smart Capital. 

Incorporated in 2019, Smart Capital has a public shareholding, private management and public-private governance. The company is regulated by the Financial Markets Council (Conseil des Marchés Financier), under the supervision of the Ministry of Communication Technologies, and the Ministry of the Economy, Finance and Investment Support alongside the CDC (Caisse des Dépôts et Consignations).

According to Smart Capital (2020), “Startup Tunisia – الناشئة تونس refers to the national initiative undertaken by the State in collaboration with the private sector, civil society, and international partners to develop a dynamic ecosystem of startups from Tunisia.”

The company’s mission is to make “Tunisia a country of startups at the crossroads of the Mediterranean, from the MENA region and Africa.” It achieves this by designing and implementing the Startup Tunisia initiative.  

The Pillars of  Startup Tunisia

Startup Tunisia has three core pillars that support the actualisation of its mandate. The pillars are the Startup Act—the unique legal framework that was publicly launched on April 5, 2019, Startup Invest—the financing framework to create an ecosystem of VC funds and Startup Ecosystem—the support framework that also promotes the Tunisian ecosystem.

All these pillars work in concert with each other to bring about the realisation of the Startup Tunisia dream. 

For instance, the Startup Act provided a basis for ‘labelling’ a company as a startup. “The Startup Label is a label of merit granted to any company incorporated under Tunisian laws which complies with the labelling criteria. This Label is the keystone for accessing the Startup Act universe and its advantages.”

In the first year of the Act’s launch (April 2019 – April 2020), about 300 startups received the Startup Label. As of last year (2024), that number has quadrupled to about 1,200 which signifies increasing activity in the country’s startup ecosystem and application scrutiny.

In a previous article on the Tunisian ecosystem, we touched on the Startup Act. So, next we focus on ANAVA fund of funds—one instrument under the Startup Invest pillar—following a conversation with its Director, Zied Ben Othman.

Spotlighting ANAVA

Anava, the fund of funds (FoF) managed by Smart Capital, has a revised target size of €100 million. Its core purpose is to spur the VC industry in the country by investing in VC funds targeting Tunisian startups. Interested VC funds will have to incorporate an entity in Tunisia and meet some other eligibility criteria.

The FoF has reached a first close of €60 million with the World Bank through the CDC (€40 million) and KfW (€20 million), the German DFI, as Limited Partners (Investors). 

Anava is sector- and stage-agnostic to “diversify the risks and maximise performance at large scale.”

It aims to invest in over 13 VC funds. So far, ANAVA has committed €45 million in 10 child funds, steadily progressing towards its target.

Seven of the portfolio funds are focused on Tunisia while the other three are regional pan-African funds.

In ascending order of average ticket sizes, the disclosed local Tunisian child funds are: 216 Capital Fund I, Go Big Partners’ Go Live Fund, Flat 6 Lab’s Tunisia Seed Fund II, Medin VC’s Titan Seed Fund, 216 Capital Fund II, while the regional funds are Loftyinc Alpha Fund I, Janngo Startup Capital Fund, and Silicon Badia’s BIF II Fund.

At a deeper level, ANAVA is aiming to reach 230 beneficiary startups by 2027 through these portfolio funds.

Already, these child funds have invested in 45 startups cutting across 12 African countries. The countries are Tunisia, Nigeria, Senegal, Morocco, Ivory Coast, Cameroon, Egypt, Congo-Brazzaville, South Africa, Mauritius, Ghana, and Kenya.

The impact so far on the Tunisian ecosystem

As a result of ANAVA’s pioneering activity in the ecosystem, there are now more investment firms in the country which is leading to the creation of new startups which is ultimately improving the lives of citizens and residents in the country.

For instance, all of the 10 child funds with Tunisia exposure were launched after 2019. And the combined value of their capital raise is exponentially more than Anava’s direct investment in them. That means that there will be more money available to startups in Tunisia than what ANAVA alone could have catered for. For instance, double (€90 million) the amount that ANAVA has committed to the ten funds (€90 million) has been raised for the Tunisian ecosystem.

In response, Tunisian startups created in the last five years (2019 to date) have increased by four times.

Also, as a second-order effect, Tunisia has experienced two big exits InstaDeep and Expensya. The latter’s Series B in May 2021, was co-led by Silicon Badia as the first investment from its BIF II, an ANAVA child fund. Those startup founders have now become angel investors in the ecosystem which just shows you the flywheel effect of the Startup Tunisia initiative. 

Similarly, despite tax rate fluctuations, tax revenue has trended upward since 2019 as more companies mean a broader base of tax income. Tunisia’s tax revenue for 2023 reached an all-time high of $12.25 billion from $9.85 billion in 2019, boasting a 24.4% growth.

What else?

Zied Ben Othman admits that running an international fund with exchange rate restrictions in Tunisia has been a challenge.

Also, being the first entity to launch a fund of funds has forced the team to think outside the box of what’s generally obtainable with investment vehicles. He describes ANAVA as a Specialised Investment Vehicle. 

Regardless, Tunisia has a good thing going with all eyes on the country. Many more countries have adopted their Startup Act framework and continue to follow in their footsteps.