A joint venture fund aimed at growing women-led businesses in Africa has reached its second close at $75-million and will announce its first investment soon, reports Tech Cabal.
Known as Alitheia IDF, the fund focuses on investments for SMEs with high-growth potential in Africa. The fund invests in businesses that are majority-owned, majority-run or mainly created to serve women. The fund was established in 2014 between Alitheia Capital – a private equity investment and advisory firm in Nigeria, and IDF Capital in South Africa.
“Through these three main criteria, we apply a gender lens to invest in businesses across western and southern Africa,” says Temilade Denton, Impact and ESG manager at Alitheia Capital as quoted by Tech Cabal.
AlitheiaCapital was founded by Olajumoke Akinwunmi and Tokunboh Ishmael. The latter is chairman of the board for the Africa Venture Capital and Private Equity Association (AVCA). IDF Capital was founded in 2008 by Polo Leteka, and counts Shell and Telkom amongst its investors.
The fund’s priority sectors are agriculture, agro-processing and in companies that provide essential goods and services. It will provide capital of between two and five million dollars to high potential mid-sized companies in countries from Nigeria and Ghana to South Africa, Lesotho, Zimbabwe and Zambia.
“We are excited about this fund,” Denton says, the firm had been working for quite some time to secure it.
Alitheia IDF had an initial target of $100-million and was quickly seeded by the Africa Development Bank (AfDB) with an equity investment of $12.5-million in December n2015.
In November 2019, a development finance institution for Canada, FinDev Canada, made a $7.5-million investment.
The fund is expected to invest in 12 SMEs with the potential to scale beyond their countries of origin. The fund’s target outcomes include creating 5000 jobs for women in Africa and providing up to 100,000 women with access to essential goods and services.
Women-Focused Ventures in Africa
Alitheia IDF is one of a growing number of female-focused venture funds in Africa.
Jango Capital is another. The firm was founded by Senegalese-born investor and former Jumia executive Fatoumata Ba. Jango Capital is very close to achieving its $65-million target.
Rising Tide Africa is a Lagos-based female angel investing and mentorship network founded by Yemi Keri and Ndidi Nnoli-Edozien in 2017. The group has invested in 7 companies (including Migo), 60% of which are female-led.
The funding gap in African women-led SMEs market is as much as $42 billion according to the AfDB. Closing the gender financing gap, the bank says, will lead to growth in GDP for African economies.
Edited by Luis Monzon
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