The German development bank KfW has partnered with Sahel Capital to launch the $24 million Social Enterprise Fund for Agriculture and agritech startups in Africa (SEFAA). Sahel will serve as an investment adviser to SEFAA, an impact fund that aims to reduce poverty in Sub-Saharan Africa by investing in social agricultural enterprises (SAEs).
“We are delighted to be selected as investment adviser to SEFAA and grateful to KfW for its constant support and commitment to our shared mission of driving growth in this critical sector. We are excited at this next phase in the firm’s evolution as we leverage existing sector expertise, a broad network and regional partnerships to expand our investment footprint outside Nigeria into West, East and Southern Africa,” Mezuo Nwuneli, Managing Partner at Sahel Capital, said.
Here Is What You Need To Know
- With SEFAA, Sahel will launch a new impact-first investment approach that will be distinct from, but complementary to, its first FAFIN fund and its upcoming successor Fund II, both of which are growth capital funds focused on established SMEs with significant growth potential.
- SEFAA will largely invest in debt (with the option of investing some stock or quasi-equity) to bridge the financing gap for early-stage businesses that aren’t yet established or successful enough to attract equity and/or debt from commercial capital sources.
- KfW has long been a strong supporter of agricultural development on the African continent, having anchored several other funds such as the Africa Agriculture and Trade Investment Fund (AATIF), the Fund for Agricultural Finance in Nigeria (FAFIN), and the Lending for African Farming Company over the last eight years (LAFCo).
- SEFAA is intended to create and preserve jobs, as well as achieve six of the UN Sustainable Development Goals, in addition to its targeted aim of reducing poverty through its investments (SDGs 1, 2, 3, 4, 5 and 6).
A Look At Sahel Capital And How Startups Can Access The New Fund
Since its inception in 2010, Sahel Capital, which is based in Lagos, Nigeria, has invested in and built SME agribusinesses throughout seven agricultural value chains, raising its first $65.9 million Fund for Agricultural Finance in Nigeria (FAFIN) in 2014 (final close in 2017).
Read also:IBM Launches Digital4Agriculture Initiative For African Agritech Startups
By supporting creative business incentives and outgrower programmes, FAFIN has produced over 118,000 direct and indirect jobs, over half of which are held by youth, and engaged with or sourced produce from over 16,000 smallholder farmers (43 percent of whom are women).
Sahel Capital will invest in SAEs across the agricultural value chain, with a particular focus on enterprises or intermediaries that help smallholder farmers (SHFs) increase productivity, address market access issues or information gaps, or provide agricultural finance tailored to SHFs’ specific needs and production cycles.
To know more about the new fund and how to pitch click here.
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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.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer