Sabou Capital, a new SME-focused investment fund that aims to close the funding gap for high-potential medium-sized enterprises in Anglophone and Francophone Africa, was launched on Monday, according to two-time founder Surayyah Ahmad.
The fund aims to invest between $350,000 and $1.5 million in 25 SMEs, targeting agriculture, renewable energy, supply chain, logistics, and mobility sectors.
Sabou Capital’s investment approach
Sabou Capital positions itself as a “micro-private equity” firm, focusing on SMEs that leverage technology to improve operations rather than being purely tech-driven. This approach differentiates it from traditional venture capital firms, which often seek high-growth tech startups.
Ahmad explained, “We are more of a hybrid—looking at SMEs with growth potential, not necessarily VC-scale, but with unmet demand that can leverage funding and technical assistance to grow”. The fund aims for a modest return of 2-3x, competing with private equity firms like Aruwa Capital and Catalyst Fund.
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Sabou Capital also adopts a gender-lens investment approach, prioritizing funding for women entrepreneurs.
Ahmad noted, “For every dollar invested in a woman, the return is 2x. Yet women face disproportionate barriers to funding. They often lack the networks and resources to go out and raise capital”.
The fund will provide technical assistance to guarantee that its portfolio companies are investment-ready, emphasising operational systems, financial management, and corporate governance.
Sabou Capital expands geographic reach
Due to their economic stability and growth potential, Sabou Capital has selected Nigeria, Senegal, and Côte d’Ivoire as its geographic concentration.
Christian Amouo, a seasoned private equity professional with a specialisation in Francophone markets, has been appointed as general partner. Amouo previously established his fund in Cameroon, where it effectively supported four companies, three of which are still operational.
Ahmad highlighted the need to diversify risk due to Nigeria’s economic challenges, stating, “As Nigeria grapples with high inflation, currency devaluation, and slower growth, we decided to leverage the expertise of the founding team to diversify our risk.”
Sabou Capital has already found 20 interesting startups in its queue and intends to start official fundraising in July.