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Africa-focused uMunthu II fund reaches €57m first close 

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Published: 5 June 2023

Goodwell Investments and Alitheia Capital, partners in the fund, say Africa’s impact investment opportunities remain strong, despite global market uncertainties.

The uMunthu II fund backs African businesses providing high-quality, affordable goods and services for low-income groups, in areas including food, housing, transportation, and healthcare | Eva Blue on Unsplash

Goodwell Investments and Alitheia Capital have announced a €57m first close for their Africa-focused uMunthu II fund, which invests in early and growth-stage SMEs, with an emphasis on women-led businesses. 

Backing has come from a group of family offices, private investors and institutional investors. The partners are targeting a final close of at least €150m within two years, a figure that Goodwell’s managing partner Els Boerhof told Impact Investor in a May interview she was confident would be reached, despite the uncertain investment climate. 

The partners say growth prospects for impact investments in Africa continue to be strong compared to other parts of the world, underpinned by the dynamism of a young population and expanding digital infrastructure, which are allowing innovative business models to reach larger pools of consumers.  

“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,” Boerhof said on announcing the first close. 

Tokunboh Ishmael, Nigeria-based Alitheia Capital’s co-founder and managing director, said the uMunthu II fund would tap into the huge potential of inclusive businesses providing high-quality, reasonably priced goods and services for low-income groups, in areas including 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,” she said. 

High-impact strategy 

Goodwell said its overall strategy of investing in high-impact sectors was reflected in its existing investments, such as Kenyan ecommerce business Copia, Mozambique’s Chicoa Fish Farm, Kenyan-based trade solutions provider Sendy, Zambia-based Good Nature Agro,  Educational services provider Instill Education and vegetable oils producer and supplier Origen Fresh

The uMunthu II fund will seek out women-led businesses in particular because of the urgent need for more investment – only 15% of venture capital funding currently goes to companies founded and or led by women, the partners said. 

Dutch-based Goodwell has teams in Kenya, Nigeria, South Africa and the Netherlands and has been active for more than 15 years, investing in sectors providing basic goods and services and income generation opportunities to underserved communities in Africa and India, while achieving “strong” financial returns. Alitheia Capital is a private equity firm based in Lagos State, Nigeria with profit-with-a-purpose impact objectives. 

The uMunthu II is the third fund the two partners have worked on since creating an alliance in 2011. Its predecessor, the $70m (€64m) uMunthu I fund, launched in 2019 invests in early growth-stage companies in microfinance, food and agriculture, mobility, and logistics in sub-Saharan Africa. 

Boerhof told Impact Investor in the May interview that the uMunthu I fund was able to raise money without any development bank involvement, an achievement she described as “pretty unique”. She said Goodwell now had more than 100 private investors across all of its funds. 

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