May 3, 2021

By Lynda Kiernan, Global AgInvesting Media

Amsterdam-based Goodwell Investments announced it has launched Goodwell V – a new US$60 million multi-sector private  equity fund focused on supporting high-growth SMEs and sustainable development in Africa.  

With more than 20 investments already deployed across Africa through its teams in Nigeria, Kenya, and South Africa (include Tomato Jos, Chicoa Fish Farm, Good Nature Agro East and Africa Fruits), Goodwell is looking to channel capital from private investors, family offices, and foundations to build a new portfolio of companies across agriculture, financial inclusion, mobility, healthcare, and the education sectors.

“We are convinced that businesses led by local entrepreneurs are the key drivers of inclusive growth in Africa,” said Nico Blaauw, director of communications, Goodwill Investments. “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.”

Goodwell V will act as the cornerstone feeder for an institutional fund that the company plans to launch in the second half of this year, and will also earmark capital for follow-on funding for existing companies in the Goodwell portfolio such as Tomato Jos, Good Nature Agro, Copia, MFS Africa, and Nomanini.

“Our portfolio companies are showing average revenue growth of over 50 percent per annum,” noted Blaauw. “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.”  

Africa in The Ascent

Many economies across Africa continue on a growth trajectory that not even a global pandemic can impede. Ethiopia, Uganda, Ivory Coast, Egypt, Ghana, Rwanda, and Kenya weathered the economic fallout of COVID-19 so well that they ranked among the world’s top ten rapidly growing economies of last year. 

This growth is expected to continue in the coming decade as a young population, accelerated urbanization, and more conducive business environments across the continent give rise to greater purchasing power and rising household consumption rates, which are forecast to reach $2.5 trillion by 2030.

This landscape has created opportunities for driven entrepreneurs to build upon these foundations to launch scalable and innovative businesses solving the social and development challenges being faced by their communities.

However, although investment in African startups jumped from $400 million in 2015 to $2 billion in 2019, only a mere 2 percent of this capital was from private equity investment, according to Goodwell.  And while capital commitments to early-stage and growth-stage businesses in Africa is doubling every year, it is barely the beginning of what is needed to meet the growth potential present on the continent. In order to achieve inclusive growth and give hundreds of millions of underserved consumers the ability to access needed essential goods and services, these investments need to occur at scale.

Tayo Oviosu, the founder and CEO of Paga, one of Goodwell Investments’ portfolio companies said, “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 sees things the same way!”

Over the past 15 years Goodwell has committed more than EUR150 million (US$182 million) in fucning to 35 inclusive businesses across Africa and Asia, and states that it will continue to pursue its long-standing commitment to impact investing in businesses like Paga, and others, while also reporting to-quartile returns.

Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.