Alitheia IDF (AIF), a private equity fund focused on women in Africa, has secured $100 million to invest in gender-diverse firms across the continent.
The fund aims to close the funding gap for women-owned or led firms in Africa, where women startup owners are less likely to secure investment despite their growing businesses.
Women-only entrepreneurs have gotten less than 1% of the almost $5 billion financed by African businesses thus far this year.
Tokunboh Ishmael, Alitheia’s Nigerian partner, highlighted how women in Africa are treated unfairly in the consumer and producer spaces in Africa.
“Globally, women have tremendous purchasing power as consumers and controllers of household economics. In the same vein, women entrepreneurs have a significant presence in Africa’s SME sector with African women making up 58% of the continent’s self-employed population. However, despite this economic power and presence, they are underserved as consumers and producers.”Tokunboh Ishmael
Ishmael noted that women’s exclusion has had a significant influence on Africa’s economic growth, since more than half of the continent’s population’s potential stays untapped owing to structural and systemic flaws.
“We are proactively working towards filling this gap with a clear mandate to support women-led businesses across the continent while raising awareness for gender smart investment as a path towards inclusive economic growth.”Tokunboh Ishmael
Businesses to be supported
Alitheia invests in early-stage enterprises in Nigeria, South Africa, Ghana, Zimbabwe, Lesotho, and Zambia, which accounts for only a small portion of Africa’s 55 countries.
The fund expects that through investing in women, it would be able to unlock the potential of African women-led businesses and, as a result, African countries’ economic outlook would be bettered.
The African Development Bank, Bank of Industry Nigeria, FinDev Canada, Dutch Good Growth Fund, and the European Investment Bank are among the fund’s investors. The European Investment Bank (EIB) contributed $24.6 million to the fund.
Thomas Stros, Vice-President of the EIB, also mentioned how women-led firms continue to face funding challenges. He therefore hoped that this investment would reduce the struggle.
“Women-owned businesses still struggle to raise funding, although they have proven their performance. I am very pleased to support a true ‘by women for women’ 2X Flagship Fund, which invests in companies creating job opportunities while enhancing diversity in sub-Saharan Africa’s economy.”Thomas Stros
The EIB’s investment in Alitheia IDF is part of the SheInvest program, which aims to raise $2.26 billion in funding to promote gender equality and women’s economic development in Africa.
Alitheia received an additional $100 million in funding after raising $75 million in 2019. The money will be used to fund women-led businesses in the targeted countries. Among the businesses supported by the fund are Ghana’s Jetstream Africa, South Africa’s AV Light Steel and Nigeria’s ReelFruit Ltd, SKLD (formerly SchoolKits) and Chika’s Food.
Chika’s Food and ReelFruit, both of which obtained $3 million in series A funding two months ago, make and supply light steel buildings, while AV Light Steel manufactures and distributes light steel structures. Educational, hygienic, and office supplies are all available from SKLD.
Polo Leteka, Alitheia’s principal partner in South Africa, also intimated that women in Africa have a lot of untapped potentials, but that with this fund, that will be a thing of the past.
“The historic inability to appropriately capture the economic potential of African women has affected Africa’s development. Alitheia IDF is on a mission to fill this gap by using a gender-smart approach, and financial capital to empower women as consumers and producers.”Polo Leteka