Lagos-based Aruwa Capital Management has raised $35 million for its second fund, Aruwa Capital Fund II, meeting 90 percent of its $40 million goal, according to a statement on Monday. This fundraising milestone surpasses the total amount of its first fund, which closed in 2022 at just over $20 million.
Strong support from local and international Investors
Aruwa Capital Fund II has attracted a mix of new and returning investors like the Mastercard Foundation Africa Growth Fund (MFAGF) and the Visa Foundation, while new investors include Nigeria’s Bank of Industry (BOI), British International Investment (BII), and the Electrification Financing Initiative (ElectriFI).
Dr. Olasupo Olusi, Managing Director at BOI, said, “We are proud to be the first local institutional investor in Aruwa’s second fund. Aruwa has consistently demonstrated a strong track record in bridging SME funding gaps and catalysing both local and international capital.”
Benson Adenuga of BII added, “Aruwa is well positioned to bridge the early-stage funding gap, particularly for women entrepreneurs in Nigeria and Ghana.”
Founder Adesuwa Okunbo Rhodes highlighted investor confidence despite a challenging fundraising environment: “We are excited to have raised 90 percent of our target fund size for Fund II. This indicates our investors’ confidence and trust in our ability to execute on our proven investment strategy and double down on achievements recorded so far”.
Aruwa Capital’s $35 million boosts gender-lens Investing
Aruwa Capital is a female-founded and led firm that takes a gender-lens approach, prioritising investments in businesses founded or led by women.
In Fund I, 73 percent of companies backed were women-led or founded, and the portfolio has supported over 200,000 direct and indirect jobs. Fund II continues to focus on sectors such as healthcare, energy access, financial services, and consumer staples like food and agribusiness in Nigeria and Ghana.
The fund intends to invest in high-growth, impact-driven companies totalling $1 million to $3 million. Fund I has made notable investments in cold-chain logistics company Koolboks, fintech company FairMoney, and Life Stories Healthcare.
A Nigerian fast-casual restaurant chain and safety boot producer, Yikodeen, are examples of early investments in Fund II focused on enhancing women’s economic prospects.
Rhodes emphasised the importance of thorough due diligence and founder character assessment in Fund II to ensure sustainable growth: “Spending more time on the character of the founder is something we’re going to do more of in Fund II. You can’t build a company without good people implementing your strategy”.
With plans to increase the fund size to $50 million or possibly $60 million, Aruwa Capital aims to onboard more global institutional investors and continue supporting SMEs that contribute to inclusive economic growth in West Africa.