Africa’s first women-focused private equity firm, Alitheia IDF, has announced the closing of a $100-million fund with the European Investment Bank (EIB) and other investors.
Analysts and industry experts believe the recent move will help bridge the more than $42-billion investment gap between male and female entrepreneurs on the continent.
Led by principal partners Tokunboh Ishmael and Polo Leteka, Aitheia IDF is a pioneering private equity fund that identifies, invests in and grows small and medium enterprises led by gender-diverse teams to achieve solid financial returns and tangible social impact for communities in Africa. It invests in areas that engage a sizeable percentage of women as entrepreneurs, producers, distributors, or consumers. Some sectors include agribusiness, consumer goods and creative industries.
The company has operational offices in Lagos and Johannesburg and has so far invested in six African countries, namely: Nigeria, Lesotho, Ghana, Zambia, Zimbabwe and South Africa.
This year alone, the company led investment rounds in five women-led businesses, including: Jetstream Africa (Ghana), ReelFruit (Nigeria), SKLD (formerly SchoolKits, Nigeria), AV Light Steel (South Africa) and Chika’s Food (Nigeria).
Despite comprising 58 percent of Africa’s self-employed population, a study by The Africa Report revealed a $42-billion funding gap for female entrepreneurs in Sub-Saharan Africa. Recently, the gender funding imbalance has deteriorated, with most female-led SMEs facing the existential threat of a permanent shutdown, no thanks to the COVID-19 pandemic.
However, the report estimated that bridging this funding gap might boost the continent’s aggregate GDP by $316 billion in 2025.
Taking this into account, the deal could help to catalyze the power of African women as critical stakeholders in African economies.
Commenting on the deal, Ishmael told Disrupt 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 percent of the continent’s self-employed population. However, despite this economic power and presence, African women are underserved as consumers and producers.”
