Verdant Capital, a South African investment manager, has announced the first $36 million closing of its new investment vehicle, the Verdant Capital Hybrid Fund, which focuses on micro and small businesses in Africa, including fintechs.
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The German KfW Development Bank, the fund’s initial investor, has pledged $34 million. Private investors have also pledged money to the Verdant Capital Hybrid Fund.
“The fund will invest hybrid capital and subordinated debt instruments in inclusive financial institutions across the continent. It will target specialized banks, microfinance organizations, leasing and factoring companies, fintechs and other non-banking financial organizations,” the company said in a statement.
Here Is What You Need To Know
- Verdant Capital’s last operation was two months ago, hence the launch of this new fund is timely. As part of a $80 million fundraise, the South African fund management firm advised the Mauritian telecoms service provider West Indian Ocean Cable Company (WIOCC) in November. The funds generated will be used to support the company’s expansion plans and expedite its investments in digital infrastructure across Africa.
- The Verdant Capital Hybrid Fund intends to secure the availability of equity and hybrid capital in African financial institutions, in order to help the continent’s capital markets expand. The amount of money that will be allocated by this new investment entity has yet to be determined. Verdant Capital Hybrid Fund’s capital will be supplemented by debt financing provided by additional investors, according to the fund manager.
- In addition to this first round, Verdant Capital intends to hold two further rounds in order to attain a total of $100 million during the new Fund’s ultimate close.
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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.
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