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 investments soon.
Called Alitheia IDF, it is an SME investment fund for businesses with high-growth potential in Africa. The fund invests in businesses that are majority-owned, majority-run or mainly created to serve women.
“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, to TechCabal.
Alitheia IDF is a joint venture fund established in 2014 between Alitheia Capital, a private equity investment and advisory firm in Nigeria, and IDF Capital in South Africa.
Alitheia Capital was founded by Olajumoke Akinwunmi and Tokunboh Ishmael. The latter chairs the board of the Africa Venture Capital and Private Equity Association (AVCA). IDF Capital was founded in 2008 by Polo Leteka, and counts Shell and Telkom among its investors.
The fund’s priority sectors for this fund 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 6 countries: Nigeria, Ghana, South Africa, Lesotho, Zimbabwe and Zambia.
“We are excited about this fund,” Denton says, noting that it has taken the firm quite some time to accomplish their fund target.
Alitheia IDF had an initial target of $100 million. The Africa Development Bank (AfDB) seeded it with an equity investment of $12.5 million in December 2015.
In November 2019, FinDev Canada, the development finance institution for Canada, made a $7.5 million investment in the fund.
Denton is upbeat that the fund will make a difference in the private equity investment space as there are not many other firms seeking to particularly target women-centered businesses.
The fund is expected to invest in about 12 SMEs with the potential to scale beyond their countries of origin. Some of its target outcomes include creating 5,000 jobs for women and providing up to 100,000 women with access to essential products and services.
Apart from the Alitheia IDF fund, Alitheia Capital is a West African investment partner for Goodwell Investments, a Netherlands-based early stage investment firm in financial services and tech companies in India and Africa.
Through Goodwell’s funds, Alitheia has invested in Paga, MAX.ng and Lidya, the fintech company that expanded operations to Poland and Lithuania in October 2019.
Alitheia IDF is one of a growing number of female-focused venture funds in Africa.
Janngo Capital, founded by Senegalese-born investor and former Jumia executive Fatoumata Ba, has a EUR60 million target and is reportedly close to achieving it.
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.