The Goodwell and Oxfam Novib fund will aim to address the “missing middle” of East Africa through investments in early-stage companies.
Goodwell Investments (Goodwell), an impact investment firm, and Oxfam Novib have announced the launch of a EUR 20 million (USD 22 million) fund to address “the missing middle” of East Africa. The fund will invest in early-stage growth SMEs that are having difficulty in acquiring funding.
Goodwell and Oxfam Novib
Goodwell Investments is an impact investment firm focused on inclusive growth in sectors providing basic goods and services and income generation opportunities to underserved communities in Africa and India. Oxfam Novib is an NGO that campaigns and works for equality, equal opportunity, environmental concerns and more.
Pepea
The two organizations have come together to leverage their experience of supporting SMEs. The EUR 20 million fund has been named Pepea and aims to support SMES that have high impact potential.
“Oxfam Novib played a sterling role in developing the microfinance sector as a means to provide access to financial services where they were most needed. As that sector has matured beyond the realm of NGOs, we are ready to change direction toward a less-served segment of the market. We acknowledge the challenges of SMEs in the region – especially those that are women-owned – to access fine-tuned patient capital and we now want to play a role to address with that needs,” said Tamara Campero, investment manager at Oxfam Novib.
Operations and sectors of investment
Goodwell will manage Pepea’s day-to-day operations, supporting the success of the fund and development of the portfolio with its local investment managers and analyzing the potential for follow-on investments from other Goodwell funds. Oxfam Novib and Goodwell are both actively involved in setting and monitoring the fund’s strategic course.
This new fund focuses primarily on the sustainable agriculture, energy, clean mobility and logistics, and waste management sectors. These industries produce many of the basic goods and services that represent a huge proportion of household spending for lower-income communities. To improve the quality and affordability of these essentials, Pepea is targeting SMEs that drive the growth of a greener, fairer, and more gender inclusive ‘human economy’ that serves the needs of society while respecting the planet.
Gender-lens investing
The fund’s focus on inclusion also serves Oxfam Novib and Goodwell’s approach to gender-lens investing. Pepea offers an opportunity to take concrete action on gender equality by investing in women working in impact SMEs. By using innovative venture debt structures, with a focus on mezzanine finance, the investment instruments were specifically designed to better encompass the needs of female entrepreneurs and stakeholders.
“Goodwell is always looking for innovative ways to better serve the needs of SMEs, and we’re extremely pleased to have the opportunity to do so with one of the most professional, critical NGOs in the impact sector. There are so many synergies between our organizations, and I’m convinced that together, we can set higher standards in the impact investing space,” said Els Boerhof, managing partner at Goodwell Investments.
Egyptian VC firm Camel Ventures recently launched a USD 16 million investment fund targeting African and Asian startups.