Women-led private equity fund Alitheia IDF raises $100 million to invest in gender-diverse businesses across Africa

Alitheia IDF (AIF), Africa’s first women-led and women-focused private equity fund has raised US$100 million to invest in gender-diverse businesses across the continent.

The fund is looking to bridge the financing gap for women-led or owned businesses in Africa – where women startup founders are less likely to receive funding despite their increasing enterprise.

Women-only founders have received less than 1 percent of the nearly US$5 billion that has been raised by startups across Africa in 2021.

“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 Small and medium-sized enterprise (SME) sector with African women making up 58 percent of the continent’s self-employed population. However, despite this economic power and presence, they are underserved as consumers and producers,” said Alitheia’s principal partner in Nigeria, Tokunboh Ishmael.

Ishmael adds that the exclusion of women has had a huge impact on Africa’s economic growth as the potential of more than half of its population remains untapped due to structural and systemic issues.

“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,” she said.

Alitheia invests in growth stage companies across Nigeria, South Africa, Ghana, Zimbabwe, Lesotho and Zambia, representing a small fraction of the 55 countries in Africa.

By investing in women, the fund hopes to unlock the potential of women-led businesses in Africa, and, ultimately, the economic transformation of their countries.

The fund’s investors include the African Development Bank, Bank of Industry Nigeria, FinDev Canada, Dutch Good Growth Fund and the European Investment Bank. European Investment Bank (EIB) joined the round as the closing investor, committing US$24.6 million.

“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,” said EIB vice-president, Thomas Östros.

The EIB’s investment in Alitheia IDF is part of its SheInvest initiative which seeks to mobilize about US$2.26 billion of investment to boost gender equality and women economic empowerment across Africa.

The new US$100 million funding for Alitheia comes after it raised US$75 million in 2019, which it is using to finance women-led businesses across the target countries. Among the enterprises 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.

Jetstream Africa, which raised US$3 million in July last year, makes it possible for businesses across Africa to manage their cross-border supply chains by the aggregation of private sector logistics providers at African ports and borders.

AV Light Steel manufactures and supplies light steel structures while Chika’s Food, and ReelFruit, which raised US$3 million in series A investment 3 months ago, are both snack manufacturers. SKLD supplies merchandise including educational, hygiene and office supplies.

“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,” said Alitheia’s principal partner in South Africa, Polo Leteka.