Since 2009, Goodwell Investments, an impact investment firm based in the Netherlands, Nigeria, South Africa and Kenya, has been busy investing in African businesses. It hardly misses a year. And now, as a way of continuing with its mission in Africa, the firm has launched a new $60m fund called Goodwell V.
Following in the footsteps of its predecessor funds, Goodwell V seeks to channel capital to fast-growing, scalable small and medium-sized businesses from private investors, family offices, and foundations.
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“We are convinced that businesses led by local entrepreneurs are the key drivers of inclusive growth in Africa. Therefore, the path to inclusive growth in Africa is to support early-stage companies who are best positioned to solve critical challenges in their communities. Our portfolio companies are showing average revenue growth of over 50% per annum. They have been able to withstand the perils of the pandemic by doing what they do best: providing access to essential products and services like food, transport, healthcare, and financial services. We are excited to continue the journey,” said Goodwell Director of Communications Nico Blaauw.
Which Businesses Would The Latest Fund Target?
Although not surprising (since most of the fund’s previous investments have mostly gone to the preferred sectors), Goodwell’s latest fund will particularly focus on startups active in the following sectors:
Fintech:
Goodwell says at least a third (33%) of the new fund will be invested in businesses in the financial services industry, notably fintechs.
Agribusiness:
The firm also says about a quarter (25%) will be invested in agriculture.
Others
The remainder (25%) will be spread on mobility and other impact sectors such as education and healthcare.
Follow-on:
Goodwell further states that it will, most likey, be allocating follow-on funding to its existing portfolio companies such as Copia, MFS Africa, Good Nature Agro, Tomato Jos, and Nomanini.
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Some Key Investment Principles Of The Investor
Apart from investing generally in the sectors stated above, Goodwell’s general investment principles include but are not limited to the following:
- The firm invests in multiple stages, including assisting promising startups move from zero to serious traction. Investing from zero to traction greatly assisted it to strategically gain grounds in leading Nigerian fintech startup, Paga, which as at the time of the investment barely had customers.
- The investor also prefers to invest in markets where it maintains local presence. However, it can also co-invest in deals where a co-investor has local presence in the investee’s country.
- The investor targets between 15–20% returns (IRR) in euros in businesses it invests in.
- The fund can also invest in several rounds in a startup to give the investments a longer runway. The investments are kept for an average of 5–7 years, before the firm begins to consider an exit.
- Each of its investments can come by way of equity, quasi-equity and mezzanine loans, and it always aims to take minority stakes (20–30%) in its portfolio companies.
- Its preferred exit routes include secondary market sales, shareholding transfers or exchanges, distribution network realizations, or self-liquidating processes such as management buy-outs, etc.
How To Access Goodwell Investments’ Funds?
Interested companies may reach across to the firm’s team, available here; although the best way is to directly contact the firm’s key persons.
“When we met Goodwell, in 2011, we were still at a very early stage and had no formal institutional investors on board. The first investment by Goodwell enabled us to kick-start our journey, and the second one in 2015 further accelerated our growth. In 2020 we passed the mark for 17 million users, whom we serve through a network of over 35,000 agents. We see the opportunity to connect every adult in Nigeria to financial services, and we are delighted Goodwell see things the same way!” Tayo Oviosu, founder and CEO of Goodwell Investments’ portfolio company, Paga said.
Over the last five years, the firm’s local teams in Nigeria, Kenya, Ghana and South Africa have made more than 20 investments across Africa, including in Inclusivity Solutions; CopiaKenya; Sendy; Paga; WhereIsMyTransport, among others. Goodwell’s two strong local partners in West Africa are JCS Investments in Ghana and Alitheia Capital in Nigeria.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer