Alitheia Capital - Afrikan Heroes

How Africa Focused Venture Capital Interventions Can Help Tackle Poverty

July 19, 2022

Ishmael co-founded Alitheia Capital alongside Jumoke Akinwunmi

Africa focused venture capital (VC) funds deployed in the continent’s markets should result in a “trickle down” effect that addresses issues around poverty and provides underserved communities with access to vital services. This was the position of Tokunboh Ishmael, co-founder and managing partner at Alitheia Capital, captured as part of a series of case studies and podcasts produced by Disrupt Africa, commissioned by Boost Africa Technical Assistance Facility and financed by the European Union under EDF Thematic Blending and Cotonou Investment Facility.

Female fund managers are very much in the minority worldwide. In the US, only nine per cent of decision makers in the VC space are women. In Africa, no definitive numbers are yet available, but female fund managers are hard to come by – a big mistake for the VC world, as data clearly demonstrates a direct link between gender diversity in teams, and increased profitability. The Diversity dividend: Female fund managers in Africa series looks at firms that recognise this truth, and put diversity front and centre.

One such company is Alitheia Capital, which recently started deploying its US$100 million Alitheia IDF gender smart fund – actively looking to back female-founded businesses and companies serving female consumers. Co-founder and managing partner Ishmael was born in Germany, and grew up in the UK, but studied in Nigeria as she looked to connect with her parents’ roots and eventually returned full-time heading up a fund management firm.

Witnessing firsthand the extent to which prosperity and poverty exist alongside each other in Nigeria raised some important questions around venture capital models and social development.

“When I moved to Nigeria and I started working, and it was the first time I had been in Nigeria as a working adult and productive member of the economy, I couldn’t really believe the cheek-by-jowl nature of prosperity and poverty,” she said.

Responsible for deploying millions, even hundreds of millions of dollars, she asked: “If we’re deploying this kind of capital, how is it not trickling down to solve these problems or provide access to some of the essential services that these people really need?”

“Is it true that in addressing those needs you were being charitable, or could you address those needs by deploying capital and still drive for returns by also being intentional about the social and developmental returns. That’s really what struck the desire in me.”

In 2007, Ishmael co-founded Alitheia Capital alongside Jumoke Akinwunmi, with the intention of addressing the twin pillars of financial and developmental returns. The firm is proactive and intentional about supporting female founders and colleagues.

“By investing in diverse teams and being inclusive of female founders we can achieve superior returns. It has been shown that companies that have diverse teams are able to achieve over 20 per cent above the average company in terms of their returns,” Ishmael said.

Alitheia does not just invest in women for the sake of being women, but rather focuses on finding where there is an overlooked opportunity, and where money is being left on the table. The case for investing in solutions targeting female consumer spending is substantial, Ishmael said.

“If over 30 trillion dollars of consumer spend globally is decided by women, you need to be thinking about how they’re thinking, and you want to make sure you have the right people in the right seats to do the right sorts of innovations that will address their tastes and preferences. So you can’t be homogenous and think that you’re going to have the best innovation in the market. You need that diversity to ensure that,” she said.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Alitheia Capital Partners 2X Collaborative for Boardroom Gender Parity

November 12, 2021

A new partnership has been announced between the Boardroom Africa, Alitheia Capital and the 2X Collaborative aimed at improving gender parity at top management positions across Africa through the formation of the Board Diversity Charter, an initiative that will combine the power of leading global companies and investors to build and maintain diversity and equity in the boardroom.

This is coming against the backdrop of efforts by leading development finance institutions committing to advance boardroom gender parity which the CDC Group and DEG signed on to join the Board Diversity Charter to galvanise business community to accelerate female representation in boardrooms across the globe

Tokunboh Ishmael, Managing Director of Alitheia Capital

As the world marks over 25 years since the Beijing Platform for Action, companies and development finance institutions including CDC Group Plc, DEG, and Norsad Finance are taking action to make a meaningful, measurable, and lasting systemic impact on advancing women’s representation in leadership. Signatories of the Board Diversity Charter commit to maintaining boards of at least 30% women while striving to reach gender parity. They annually report on the status of their board composition and aim to broaden women’s equitable participation at all levels of company decision-making while fostering an environment that champions diversity, equity, and inclusion. Companies that have less than 30% women on their boards but intend to meet this quota within 2 years may also signal their support as Pledge Partners.

Gender diversity on boards is a strategic imperative, as evidence continues to demonstrate that companies with diverse boards enjoy better corporate governance, financial, risk management, and social return outcomes that perpetuate business success. A 2019 study (https://mck.co/3D2Rmbo) by McKinsey & Company finds that organisations in the top quartile of gender diversity are more likely to outperform on profitability — 25% more likely for gender-diverse executive teams and 28% more likely for gender-diverse boards.

The initiative was founded by TheBoardroom Africa and Alitheia Capital, two women-led organisations committed to advancing outcomes for women in the private sector and business, in partnership with 2X Collaborative, a global industry body that convenes the entire spectrum of investors to promote gender-lens investing. TheBoardroom Africa is the region’s largest community of board-ready female executives while Alitheia is a gender-lens investing pioneer.

CDC Group and DEG, two major development finance institutions (DFIs), are among the first organisations to sign on to the Charter. In 2020, CDC Group made £1.22 billion in new commitments to businesses in Africa and has now invested in almost 1,200 businesses that directly employ nearly 952,000 people. In 2020, companies co-financed by DEG employed over 2.3 million people and generated local income of EUR 120 billion. Both institutions are also inaugural members of Board Diversity Charter partner 2X Collaborative, a global gender finance initiative that convenes and equips investors with the resources they need to increase the volume and impact of capital directed towards women’s economic empowerment. Other Charter signatories include Norsad Finance, FCMB, Falcon Corporation Limited, The Water Trust, and Woodside Africa Group, among others.

Marcia Ashong, TBR Africa CEO; Tokunboh Ishmael, Managing Director of Alitheia Capital; and Jen Braswell and Jessica Espinoza, Co-Chairs of the 2X Collaborative, will serve on the initiative’s inaugural Charter Committee.

Marcia Ashong, Founder and CEO of TheBoardroom Africa said: “By launching the Board Diversity Charter, we’re telling the world that diversity is not a nice-to-have. It’s a need-to-have. Diversity reflects the reality of our world. A diverse, inclusive board not only sets the tone for management

but also for shareholders, investors, customers, employees, and other stakeholders. The knowledge and skills that diverse candidates can bring are essential to enhancing business performance in an increasingly uncertain world.”

‘Tokunboh Ishmael, Founder and Managing Director of Alitheia Capital said: “Alitheia is pleased with the launch of the Board Diversity Charter and focuses on diversity in the boardroom where key decisions to drive profitability and sustainability are made. This underpins the fact that diversity is both a moral obligation and economic imperative. Serious companies recognise the need to be intentional about diversity for effective decision making, stronger corporate governance and greater innovation to ensure superior returns to all stakeholders.”

Jen Braswell and Jessica Espinoza, Co-Chairs of the 2X Collaborative, said: “Studies have repeatedly demonstrated that women directors are key to corporate value creation and innovation. The 2X Collaborative is proud to support the launch of the Board Diversity Charter because boards are at their best when they have a diversity of perspectives represented.”

The Board Diversity Charter recently debuted an interactive toolkit for boardroom leaders that provides a comprehensive overview of the business case for diversity and inclusion and includes a roadmap for improving boardroom diversity.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

As 2020 Runs Out, Nigerian Investment Firm Alitheia Capital Remembers The Effects Of Covid-19 On Its Investments

December 27, 2020

Alitheia Capital, a private investment firm based in Lagos, Nigeria, has reported that covid-19 has been felt in its investment portfolio with varying degrees of difficulty, depending on the sectors involved.

Ishmael Tokunboh, co-founder and managing director, Alitheia Capital — *Ishmael Tokunboh, co-founder and managing director*, Alitheia Capital

“The change brought about by covid-19 created growth opportunities for some companies in our portfolio that already had the necessary technological infrastructure to continue reaching suppliers and customers. There were also challenges that required more ingenious solutions,” said Ishmael Tokunboh, co-founder and managing director of the company.

Here Is What You Need To Know

For companies in the agribusiness sector and the production of manufactured goods, the firm reports that there have been significant disruptions in the supply chain. This has led to increases in the cost of production and, in some cases, to the shutdown of operations. Containment is also presented as an element of the context with which to adapt.

“In these cases, we were able to work with the companies in our portfolio to rethink their models, find local solutions and strengthen the resilience of their processes and strategies, in order to mitigate future disruptions,” said Ishmael Tokunboh.

*All data are as adapted from Partech Africa reports for the years considered.*

Alitheia Capital COVID-19

The last challenge posed is that of funding. The companies in the private equity firm’s portfolio were at different levels of their cash flow when the pandemic hit.
The various funds under the management of Alitheia Capital benefit from the support of several institutional investors, such as the Soros Development Fund or the Dutch FMO. The company invests in business projects that are in their early stages, or in the second stage of their progression.
According to data viewed on S&P Global Ratings’ Capital IQ, 77.7% of its investments are currently in technology or finance.

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

Alitheia IDF Fund For Women-led African Enterprises Closes Second Round Of Funding At $75m

April 16, 2020

Temilade Denton, Impact and ESG manager at Alitheia Capital

There may be some hope on the horizon for African women-led startups, after all. Alitheia IDF Fund, an joint venture fund targeted at growing African women-led businesses has closed its second round of funding at $75 million and will announce its first investments soon.

“We are excited about this fund,” Temilade Denton, Impact and ESG manager at Alitheia Capital said in an interview noting that it has taken the firm quite some time to accomplish their fund target.

Here Is All You Need To Know

Called Alitheia IDF, it is an SME investment fund for businesses with high-growth potential in Africa. The fund invests in businesses that are majority-owned, majority-run or mainly created to serve women.

“Through these three main criteria, we apply a gender lens to invest in businesses across western and southern Africa,” says Temilade Denton, Impact and ESG manager at Alitheia Capital, to TechCabal.

The priority sectors for this fund are agriculture, agro-processing and in companies that provide essential goods and services.
The fund will provide capital of between two and five million dollars to high potential mid-sized companies in 6 countries: Nigeria, Ghana, South Africa, Lesotho, Zimbabwe and Zambia.
Alitheia IDF had an initial target of $100 million. The Africa Development Bank (AfDB) seeded it with an equity investment of $12.5 million in December 2015.
In November 2019, FinDev Canada, the development finance institution for Canada, made a $7.5 million investment in the fund.
Denton is upbeat that the fund will make a difference in the private equity investment space as there are not many other firms seeking to particularly target women-centered businesses.
The fund is expected to invest in about 12 SMEs with the potential to scale beyond their countries of origin. Some of its target outcomes include creating 5,000 jobs for women and providing up to 100,000 women with access to essential products and services.

Top VC investors in African startups in 2019

A Look At The Alitheia IDF Fund And How Startups May Pitch To The Fund

Alitheia IDF is a joint venture fund established in 2014 between Alitheia Capital, a private equity investment and advisory firm in Nigeria, and IDF Capital in South Africa.
Alitheia Capital was founded by Olajumoke Akinwunmi and Tokunboh Ishmael. The latter chairs the board of the Africa Venture Capital and Private Equity Association (AVCA). IDF Capital was founded in 2008 by Polo Leteka, and counts Shell and Telkom among its investors.
Apart from the Alitheia IDF fund, Alitheia Capital is a West African investment partner for Goodwell Investments, a Netherlands-based early stage investment firm in financial services and tech companies in India and Africa.
Through Goodwell’s funds, Alitheia has invested in Paga, MAX.ng and Lidya, the fintech company that expanded operations to Poland and Lithuania in October 2019.

To know more about how to pitch to the Alitheia fund, please visit there website here. While there click on Get Capital.

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