Phatisa has taken a decisive step in scaling institutional capital into Africa’s food economy, announcing a US$86m first close for Phatisa Food Fund 3 (PFF 3) alongside the signing of its first investment, the acquisition of Zaad Group, a leading African seeds and crop protection platform.
The first close, reached on 9 February 2026, is backed by a heavyweight group of development finance institutions and impact investors, British International Investment (BII), FinDev Canada, Norfund, Swedfund, the International Finance Corporation (IFC) and Phatisa itself, signalling strong conviction in the fund manager’s commercial discipline and long-term food systems strategy.
For Phatisa, the milestone underscores both continuity and momentum. PFF 3 builds on more than 15 years of sector focus and a track record that has attracted repeat capital from global DFIs seeking scalable, African-led platforms capable of delivering financial returns alongside measurable development impact.
Capital flows into the backbone of Africa’s food economy
PFF 3 will invest across Africa’s food value chain, targeting businesses with strong fundamentals and clear impact credentials. Its focus spans agri-inputs including seeds, fertiliser, crop protection and agri-tech as well as downstream infrastructure such as processing, food production, cold chain, storage, logistics, distribution and retail, alongside related services.
The fund will not invest in primary agriculture, concentrating instead on the systems that determine productivity, resilience and affordability.
The strategy is shaped by powerful macroeconomic forces. Africa is home to the youngest and fastest-growing population globally and by 2050 one in four people worldwide will live on the continent. Urbanisation is accelerating even faster. More than half of Africa’s population is projected to live in cities by 2035, intensifying demand for reliable, affordable and efficiently distributed food.
Yet Africa remains heavily import-dependent. The continent currently spends US$43bn annually on food imports, a figure forecast to rise to US$110bn by 2030, creating a large and widening opportunity for import substitution, productivity gains and regional value creation.
Meeting this demand requires sustained investment to address structural bottlenecks, low adoption of yield-enhancing technologies, high post-harvest losses and inefficient supply chains. Phatisa’s thesis is that backing scalable businesses across the value chain can improve food security while driving inclusive economic growth.
First deal: Zaad Group anchors the strategy
Simultaneously with the first close, PFF 3 signed legal agreements to acquire Zaad Group, one of Africa’s leading independent seeds and crop protection platforms, alongside management, WIPHold, the Public Investment Corporation and the Industrial Development Corporation.
The investment provides early validation of the fund’s strategy, targeting critical inputs at the foundation of food security, productivity and climate resilience. Zaad operates at the heart of a structural shift across African agriculture, the transition from open-pollinated to hybrid seeds, which materially improves yields and resilience in the face of climate volatility, particularly in rapidly growing markets.
Track record and returns underpin investor confidence
Investor appetite for PFF 3 is anchored in Phatisa’s performance. Fund 1 is nearing completion, while Food Fund 2 has already returned approximately 40% of invested capital following two recent exits. The remaining portfolio remains diversified and operational, with assets including Artcaffé, FES, IFS, Java House, Lona Group and MHL International.
The new fund maintains a commercially disciplined, impact-aligned approach, with a strong climate focus and a stated ambition to achieve Gender 2X certification, building on the success of its predecessor.
PFF 3 is targeting rolling closes over the next 12 months, with a hard cap of US$300m and is actively engaging a pipeline of additional development and commercial investors.
Development finance backs African-led execution
Roman Frenkel, Director and Head of Food, Agriculture and Natural Capital at BII, said the fund aligns with the urgent need to strengthen food systems across the continent.
“Africa’s food systems need investment that strengthens resilience and productivity across the value chain. We are delighted to renew our commitment through Phatisa Food Fund 3, building on our positive experience in Fund 2, and to support a commercially driven strategy that advances climate outcomes and inclusive growth,” he said.
Stuart Bradley, Managing Partner at Phatisa, emphasised execution and local depth as decisive advantages.
“Investing successfully across Africa’s food value chain requires deep local experience, strong partnerships and disciplined execution. Food Fund 3 builds on over 15 years of sector focus and reflects our ability to originate proprietary opportunities, back high-quality management teams and build resilient, representative businesses that deliver both returns and impact,” he said.
From a portfolio construction perspective, FinDev Canada highlighted food systems as a strategic priority.
“We are thrilled to partner with Phatisa, a long-standing leader in the African agribusiness. FinDev Canada recognises the importance of the food value chain, and the critical role it plays in advancing food security, climate action, and gender equality,” said Paulo Martelli, VP and Chief Investment Officer.
For Norfund, the emphasis is on job creation and economic development.
“Competitive food value chains are critical to job creation and economic development in Africa. Norfund is pleased to continue to support Phatisa through Fund 3 and work with a manager that can originate, structure and actively build businesses across key segments of the food system,” said Pindie Nyandoro, Regional Director for Southern Africa.
New investor Swedfund cited the fund’s systems-level approach.
“Strengthening sustainable food systems is central to our mandate, and this Fund’s focus on agri-inputs and downstream food infrastructure can contribute to improved food security, reduced losses and stronger resilience while supporting the growth of competitive African companies,” said Sebastian Süllmann, Investment Manager for Food Systems.
The IFC, through the World Bank Group’s Agri Connect initiative, framed the investment as catalytic.
“Growing Africa’s food and agribusiness sector requires long-term capital and strong partners who can help companies scale and compete,” said Farid Fezoua, Global Director for Private Equity and Venture Capital. “IFC is supporting this first close to help catalyse additional investment from both development and commercial investors, driving growth in an attractive and high-potential market.”
As climate risk, population growth and geopolitical shocks place food systems under increasing strain, PFF 3’s first close and anchor investment sends a clear signal that institutional capital is moving decisively into African food value chains, not as a defensive play, but as a growth opportunity.
For Phatisa, the challenge now is execution at scale deploying capital into platforms that can reduce import dependence, improve resilience and build competitive African businesses. For investors, the fund represents a bet that Africa’s food economy, long undercapitalised, is entering a phase where commercial returns and development impact are no longer mutually exclusive, but structurally linked.
