More of good news for Startups in Africa as Goodwell Investments has raised €20-million to invest in high-growth African startups. The Investment firm announced this last month.
Goodwell Investments is a pioneering investment firm focused on financial inclusion, fintech and inclusive growth in sectors providing basic goods and services and income generation opportunities to the underserved.
Since 2006 Goodwell has raised 5 funds with over $ 100 million in capital. Goodwell has invested equity in early stage businesses in financial services and technology companies in India and Africa, ranging from classical microfinance to mobile payments, rural banking, affordable housing finance to merchant payment networks and public transport technology.
Goodwell’s 25 portfolio companies have reached over 12 million households with more than USD 1.7 billion in financial products and services, and employ more than 30,000 employees. African portfolio companies in the fintech field include Paga (Nigeria), Nomanini (South Africa) and Musoni Systems (pan-African), and in mobility tech WhereIsMyTransport (pan-African).
In a statement announcing the fund, Goodwell Investments stated that it invests in businesses “that offer products and services to under-served people to meet their increasing demand for affordable and quality basic products”.
Goodwell Investments marketing and communications director, Nico Blaauw, in an interview told Ventureburn that the investor looks for startups with business models that are not only clear but “aim towards a clear and measurable social impact and financial return.”
“The model must be tested and business running, albeit at an early stage. The business model must be scalable, the team dedicated, passionate and competent,” he explains.
For a startup to be considered for funding it has to fill a form on the Goodwell Investments website which asks entrepreneurs a number of questions including how their business models fit with the impact investor’s mandate, the startup’s current traction and amount of funding raised.
According to Blaauw, “Once people have contacted us, we will screen the proposition (mostly outlined in a teaser of the pitch summary) on a set of basic criteria.
“To be honest, most proposals do not meet criteria. If a proposal does, it will enter a fixed process allowing both parties to develop full and transparent understanding,” he adds.
As part of the process, startups that receive funding from the impact investor normally have to give up an equity stake, this is dependent on the exact role Goodwell Investments will take as an investor.
“Goodwell does provide capital and management support. We will never take the role of the entrepreneur, hence we only go for minority stakes,” Blaauw disclosed.
However, he adds that the investor is “open to alternative financial structures if that is what the investment requires given its development stage and financial position”.
It is worth knowing that Fintech startups stand a better chance of tapping the fund.
Goodwell Investments will invest half of the €20-million fund in fintech and the rest in agriculture, health and sanitation, energy, transport and education.
According to Blaauw, “We have a solid track record in financial inclusion. Financial inclusion is the engine for the economy and core to developing an inclusive ecosystem.
“Our focus is steadily shifting towards digital financial inclusion and fintech as technology enables new business models that allow to reach larger groups of under-served consumers faster and cheaper,” he adds.
Location also matters as your startup must be in one of Goodwell Investments’ focus regions.
“80% of our fund will be invested in geographies in which we have a team on the ground,” he says.
“We currently cover Western Africa with teams in Ghana and Nigeria, Southern Africa with a team in Cape Town and we are close to having our dedicated team for Eastern Africa in Nairobi, Kenya,” says Blaauw.