Goodwell Investments has launched a Ksh. 6.5 billion ($60 million) investment fund for entrepreneurs in Africa, dubbed Goodwell V. The fund will channel capital from private investors, family offices and foundations to fast-growing, scalable small and medium-sized companies and is expected to launch in the second half of this year.
Goodwell Investments is based in Amsterdam, Netherlands. It has investments in Copia, MFS Africa, Good Nature Agro, Tomato Jos, and Nomanini
Speaking on the launch, Goodwell Director of Communications Nico Blaauw, said, “We are convinced that businesses led by local entrepreneurs are the key drivers of inclusive growth in Africa. Therefore, the path to inclusive growth in Africa is to support early-stage companies who are best positioned to solve critical challenges in their communities. Our portfolio companies are showing average revenue growth of over 50% per annum.”
With more than 20 investments across Africa through its local teams in Kenya, Nigeria and South Africa, Goodwell V will build a new portfolio of companies across various sectors in Africa.
At least a third of the funds will go to startups in financial inclusion, a quarter in agriculture, and the remainder in mobility and other impact sectors such as education and healthcare. Goodwell V will also allocate follow-on funding to existing portfolio companies, such as Copia, MFS Africa, Good Nature Agro, Tomato Jos, and Nomanini.
“When we met Goodwell, in 2011, we were still at a very early stage and had no formal institutional investors on board. The first investment by Goodwell enabled us to kick-start our journey, and the second one in 2015 further accelerated our growth. In 2020 we passed the mark for 17 million users, whom we serve through a network of over 35,000 agents,” said Tayo Oviosu, founder and CEO of Paga, a Goodwell Investments’ portfolio company.
A growing youth population, together with rapid urbanization and improving business environments across Africa, are contributing to an increase in purchasing power and rising household consumption predicted to reach $2.5 trillion by 2030.
While investment in African startups grew from Ksh. 40 billion ($400 million) in 2015 to Ksh. 200 billion ($2 billion) in 2019, just 2% of global private equity investment reaches the continent. The capital committed to early and growth-stage businesses in Africa is doubling every year but still merely scratches the surface of the growth potential. To contribute to inclusive growth and provide access to essential goods and services to hundreds of millions of underserved consumers, investment needs to happen at scale.
Goodwell has so far provided over Ksh. 19.7 billion (EUR 150 million) in funding to 35 inclusive businesses across Asia and Africa over the past 15 years.