Adesuwa Okunbo Rhodes makes history as she becomes the first female, young solo GP to close a $20 million fund in Nigeria.
Aruwa Capital, a growth equity fund started by a woman in Nigeria, has closed its first institutional fund with the support of prestigious financiers like the Visa Foundation and the Mastercard Foundation Africa Growth Fund, among others.
One of the few women-owned investment firms in Africa is Aruwa Capital. The company was established in 2019 by Rhodes after she returned to Nigeria. Rhodes saw an untapped market for investing in early-stage, growing businesses started by women that offer products and services that are essential to the fast-growing female economy.
The fund’s first institutional investor and anchor is Visa Foundation. Others, like Mastercard Foundation Africa, will follow.
Najada Kumbuli, the Visa Foundation’s head of investments, explains:
“Visa Foundation is pleased to be the first institutional investor in Aruwa Capital Management. We deeply believe that to address the financing gap that women-led small businesses face, we need to empower and invest in more women-led investment funds like Aruwa.
“We were impressed by Adesuwa’s past work and the way she tailored the Fund’s loans to meet the needs of small businesses.” She stressed how important local capital was to closing the investment round as she went on to talk about what was needed. “We believe the team’s deep commitment to driving equitable and inclusive economic growth through investments will meaningfully support the business owners and the communities they operate in.”
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Rhodes stressed how important local capital was to closing the investment round as she went on to talk about what was needed. Rhodes says that since they started the fund right before COVID-19, they had to focus on raising money from inside the country because international institutions were too busy allocating money in their own countries.
“A big lesson for me is the mobilization of local capital as the key to sustainable venture capital and the private ecosystem in Africa.” “e are very pleased to have raised 30% of our fund from local investors—both private and institutional,” said Rhodes.
Aruwa Investment Funds
In a press release, Adesuwa Okunbo-Rhodes, who is the managing partner of Aruwa Capital, is said to have given her support.
Rhodes noted that women in Africa, who make up 40% of all small and medium-sized businesses (SMEs), face an investment gap and regrettably receive only 1% of startup capital. She said that this was because there weren’t enough women who were in charge of allocating capital in the area.
“Through its investment strategy, the Fund aims to create more sustainable and scalable pathways for economic growth and inclusion in the region.” “The Fund will invest $500k to $2.5 million in women-focused small and growing businesses in Nigeria and Ghana, targeting investments in critical sectors such as healthcare, fintech, renewable energy, and essential consumer goods.”
Aruwa invests in cutting-edge businesses that are prepared to grow and provide essential goods and services to the rapidly expanding female economy, as well as businesses that were founded, are led by, or have a workforce that is predominantly made up of women.
The fund has made six investments totalling more than 45% of its money into a wide portfolio of quickly growing companies, it stated. According to the statement, the fund has established a strong reputation for meticulous investment selection and active, hands-on support of management teams locally to improve business performance.
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Rhode’s Expectations
As a local investor in the “pre-private equity” market, Aruwa Capital will continue to do so, according to Rhodes, because that is “where we see the most intriguing prospects and where we believe the risk-adjusted returns are the highest.”
The company will give priority to providing follow-on financing and access to its networks and relationships with its current portfolio companies. Rhodes said that the company plans to put all of its money into the fund by the first half of 2023 because there is too much demand.
“We look forward to being on the road for Fund II again in the not-too-distant future, so we can continue to support female-focused and female-led SMEs in Nigeria.”