ImpactAlpha, December 6 — An African consortium led by Mennonite Economic Development Associates, the international development organization known as MEDA, will manage Mastercard Foundation’s new $200 million fund of funds, which is aiming to drive gender equity and good jobs in Africa. Others in the consortium include Investisseurs & Partenaires, Entrepreneurial Solutions Partners, Genesis Analytics and the Criterion Institute.
Through the Africa Growth Fund, the consortium will help facilitate financing to early-stage, growth small and medium enterprises, mainly through women-led and owned funds in Africa. $150 million will be invested directly in women fund managers; $50 million will be used for fund administration and technical assistance.
“There’s evidence that shows that out of the capital that goes into investment opportunities, only five to 10% goes to women-led investment vehicles and women-led businesses,” Samuel Akyianu, who manages the Africa Growth Fund, told ImpactAlpha. “We want to make sure that there’s opportunities for women-led investment vehicles that can support women businesses.”
Several women-led gender-lens funds in Africa are having fundraising success in 2022, despite a challenging year for raising capital. Nigeria’s Aruwa Capital, backed by the Africa Growth Fund, this week raised more than $20 million for its first fund; In September, African Women Impact Fund secured an initial $60 million from investors and Janngo Capital raised €34 million for an African gender-lens fund that has a similar good jobs strategy to the Africa Growth Fund.
Aruwa is the Africa Growth Fund’s first portfolio investment. Akyianu said the fund invested to help Aruwa reach its $20 million fundraising goal. Aruwa’s Adesuwa Okunbo Rhodes “had been raising capital for quite some time now and her sheer determination and commitment to this was incredible” he said. “We see potential for value creation in Aruwa’s portfolio and we also see potential for continuing into another fund after this $20 million is deployed.”
The fund invests between $1 million to $15 million in women fund managers working with SMEs in Africa to create good jobs, particularly for women and young people. Mastercard Foundation aims to help create 30 million jobs for women and young workers in Africa by 2030.
At least three out of every four funds in the portfolio will be led by women. Akyianu said the Africa Growth Fund “has built a pipeline of 180 diverse investment vehicles, including early-stage, growth, debt and seed VC funds and other non-traditional funds.”
The fund’s investment committee is made up of Mastercard Foundation’s Mercy Mutua, Lumka Miambo of the South Africa SME Fund, the African Venture Philanthropy Alliance’s Frank Aswani, Venture Capital Trust Fund’s Hamdiya Ismaila and Kanini Mutooni of the Draper Richards Kaplan Foundation.