Impact firm launches €50m Africa SME fund

Goodwell Investments is launching a €50 million private equity fund to invest in fast-growing African social impact companies.

Goodwell V will be a feeder fund for uMunthu II, a fund soon to be launched with a target of €150 million, a spokesperson for Goodwell told New Private Markets.

The Dutch private equity firm aims to invest in fast-growing small and medium-sized social impact companies based in Nigeria, Kenya and South Africa. It will also consider opportunities in Zambia, Tanzania, Mozambique and Ethiopia. The firm declined to comment on the fund’s returns expectations but describes itself as “successfully balancing substantial social impact with delivering a market rate of return to investors”.

The spokesperson said: “We have a large network of investors in Netherlands and are actively building investor networks in Germany, Belgium, UK and the US. We aim for a first close by June.”

A third of the capital raised for Fund V will be invested in financial inclusion, a quarter in agriculture, and the remaining in sectors including mobility, education and healthcare. Some of the capital will also be allocated to portfolio companies of previous Goodwell funds, the firm said in a statement.

Goodwell said in the statement: “Over the next decade, Africa is expected to continue to be home to some of the fastest-growing economies in the world. A growing youth population, together with rapid urbanisation and improving business environments across the continent, are contributing to an increase in purchasing power and rising household consumption predicted to reach $2.5 trillion by 2030.”