uMunthu II announces first close with EUR 57 million for inclusive businesses in Africa

Goodwell Investments and Alitheia Capital have achieved a first close of €57 million for their uMunthu II fund, which is dedicated to investing in early and growth-stage SMEs in Africa, with a particular focus on businesses led by women.

This has created significant momentum for Goodwell’s latest uMunthu II fund, which was launched last year and is expected to reach its final close within two years, with a minimum target of EUR 150 million. 

Goodwell and Altheia are highly optimistic about the potential for growth in emerging markets, particularly in Africa. The region boasts robust market fundamentals, including a young and growing population and rapidly advancing digital infrastructure, which creates opportunities for innovative business models to access a large consumer base with increased purchasing power.

According to Els Boerhof, managing partner of Goodwell: “The challenge is that even with this progress, millions of households lack access to affordable basic goods and services. At the same time, this group has significant buying power. The African market provides a huge opportunity for impact and economic growth, especially during turbulent economic times, as we learned once again during recent crises. African economies and specifically inclusive businesses that provide essential products are highly resilient and continue to grow, contrary to global developments. Because crisis or not, unmet demand for basic goods and services on the continent will rise for an ever-growing group of underserved users.”  

Leveraging their extensive expertise in impact investing spanning almost two decades, Goodwell Investments and Alitheia Capital are dedicated to bridging this gap in Africa by directing their investments towards local entrepreneurs who offer localized solutions to address pressing challenges. The investment teams, led by women, will operate from the same regions as the entrepreneurs they support, fostering a deeper understanding of the local context and facilitating impactful change.

“Tokunboh Ishmael, co-founder and managing director of Alitheia Capital comments: “uMunthu II will tap into the huge potential of inclusive businesses that provide high-quality, reasonably priced goods and services for underserved low-income groups, such as food, housing, transportation, and healthcare. Improving access to these essentials directly links to increasing participation in social and economic networks and improving livelihoods. Funding from uMunthu II will enable these innovative entrepreneurs to build businesses that reach millions of underserved end-users while delivering positive social and environmental impact and market-rate financial returns.” 

Despite the abundance of growth opportunities, African entrepreneurs still face a significant funding gap. While venture capitalists injected a record USD 6.5 billion into the 54 African countries in 2022, this amount pales in comparison to the staggering USD 200 billion raised in the United States alone during the same period. uMunthu II, with its specific focus on early and growth-stage SMEs, aims to address this gap and actively seeks out women-led businesses, as only 15% of venture capital funding currently goes to companies founded or led by women.

With a robust and diverse portfolio, uMunthu II has already made investments in nine companies, including Copia, Chicoa Fish Farm, Sendy, Good Nature Agro, Instill Education, and Origen Fresh. These investments reflect the fund’s overall strategy of targeting high-impact sectors.

In addition to expanding the uMunthu II portfolio, Goodwell Investments aims to attract new family offices and institutional investors to its network. These investors are seeking growth opportunities aligned with their impact and financial objectives, recognizing the immense potential for creating social and environmental impact on the African continent while achieving competitive financial returns.