Goodwell Investments, an impact investment firm with a presence in Nigeria, Kenya, and South Africa has today announced the launch of a new EUR50m ($60million) fund to support high-growth startups in Africa.
This new fund, named Goodwell V aims to channel capital from private investors, family offices, and foundations to fast-growing, scalable startups in the African continent.
Over the last few years, the firm has made 20 investments across Africa, successfully balancing substantial social impact with delivering a market rate of return to investors.
The firm aims to use this new fund to build a portfolio of companies across various sectors in Africa, with at least a third going to companies working to foster financial inclusion. A quarter of the investments will go towards agriculture and the remainder in mobility and other impact sectors such as education and healthcare.
The fund will also allocate follow-on funding to existing portfolio companies, such as Copia, MFS Africa, Good Nature Agro, Tomato Jos, and Nomanini.
Over the next decade, Africa is expected to continue to be home to some of the fastest-growing economies in the world. A growing youth population, an improving business environment, and the rapid urbanization taking place are all contributing to an increase in purchasing power and rising household consumption, which is predicted to reach USD2.5 trillion by 2030.
Though the capital committed to early and growth-stage businesses in Africa is doubling every year, it merely scratches the surface of the growth potential. While investment in African startups grew from USD400 million in 2015 to USD2 billion in 2019, just 2 percent of global private equity investment reaches the continent.
To contribute to inclusive growth and provide access to essential goods and services to hundreds of millions of un(der)served consumers, investment needs to happen at scale.
Director of Communications of Goodwell Investment, Nico Blaauw says he’s convinced that businesses by local entrepreneurs are the key drivers to inclusive growth in Africa.
“The path to inclusive growth in Africa is to support early-stage companies who are best positioned to solve critical challenges in their communities.”
Having provided over $180 million in funding to 35 inclusive businesses across Asia and Africa over the past 15 years. Companies in their portfolio include Paga, a Nigerian mobile money platform, Grid management company, Sparkmeter and mobility startups, Sendy & Max.ng.
Goodwell Investments has a long-standing commitment to impact investment while reporting top-quartile returns at the same time.