Women-led Aruwa Capital Leverages Global Networks to Close Gender Gaps in Africa

Funmi Ogundare 

Africa has the highest percentage, 25%, of women entrepreneurs in the world, according to UNESCO and the African Development Bank, but that zeal is not backed by access to funding, stunting women’s contributions to economic growth and their role in eradicating poverty in Africa.

According to the UNESCO study, conducted with the Africa Women’s Forum, 70% of the 427 women entrepreneurs in 10 countries surveyed pointed to access to finance as their No. 1 challenge. Various studies agree that the economic empowerment of women in Africa is vital for the continent’s social and economic development as women entrepreneurs will contribute to increased productivity, reduced poverty, and a faster route to gender equality. Africa, therefore, needs more individuals, policymakers, and organisations to create environments that provide women with the finance they need to unlock development.

Walking the talk

An example of how to effectively unlock the contributions of women-led and women-focused businesses, while achieving appreciable returns on investment, is Aruwa Capital Management (ACM), a Nigerian-based, Nigerian-led growth equity and impact investment firm. It is one of few private equity funds owned and led by women in Africa and has recorded significant success in supporting the untapped investment opportunities that have been overlooked historically. The firm has emerged as a gender equality champion, generating positive societal impact, and improving the lives of millions in underserved communities, and has generated strong financial returns for its investors.

ACM’s uniqueness is bolstered by the fact that it is led by one of the youngest woman fund managers in Nigeria with more than USD10 million raised for impact investment, Founder and Managing Partner Adesuwa Okunbo Rhodes. 

“There was a gap in the market for women who were running their firms in Africa, even though 58% of all African Small and Medium Enterprises (SMEs) are women-owned, according to the World Bank,” says Ms. Okunbo Rhodes. “Africa is where we have the highest rate of women entrepreneurship, so it didn’t make sense that they were not getting capital. That’s where we came in. When we have more women signing the cheques for capital, we see that more women get the funding they need to grow their businesses. This also has a significant economic and social impact.”

A taste of what is to come

According to Ms. Okunbo Rhodes, ACM has focused on investing in rapidly growing companies that either provide essential goods and services to the rapidly growing woman economy or businesses that are created by women and have gender-diverse leadership teams. “Our focus is on proven businesses looking to scale their operations and that are involved in health care, fintech, essential consumer goods and renewable energy,” she says. “Women-led and -focused businesses that meet our criteria and in which we invest are not only as profitable as male-led businesses but are also fueling women empowerment in their markets.”

ACM’s 2021 investment in CrowdForce, which delivers banking services to last-mile customers in rural areas in Nigeria, proves Okunbo Rhodes right. Bolstered by ACM’s investment, CrowdForce launched PayForce, which works to solve financial exclusion problems in these areas by improving access to cash. PayForce’s success led to expansion and eventual acquisition by mobile bank FairMoney, resulting in an attractive partial exit for ACM and validating their ability to pick winners first. 

A winning combination

ACM stands to strengthen its dual role as a high-impact investor for sustainability and as a gender equality champion as it benefits from a combination of Ms. Okunbo Rhodes’ experience and global networks. She started her career at Lehman Brothers, then worked in equity fund management at global leaders such as J.P. Morgan and Syntaxis Capital. Ms. Okunbo Rhodes has been involved in billions of dollars of transactions across emerging markets. She also understands strategic partnerships with global institutional investors and strategic networking within international peer groups – one of which is YPO, the world’s largest community of extraordinary young business leaders.

Ms. Okunbo Rhodes credits YPO, a community of over 34,000 leaders who have achieved significant success at a young age, for growing ACM’s ability to raise capital, but also for benefiting business leaders across the continent. “YPO has been very helpful to me by providing visibility for myself and my business,” she says. “As a global network, YPO provides invaluable networking opportunities. It also helped us raise capital by providing global connections that we could tap into.”

She adds, “The access to a global peer network that YPO provides is important for African business leaders and crucial for women. For too long, African women have been undervalued, but they deserve a seat at the table. We hope that the work we do at Aruwa Capital serves as a model that will also catalyse increased women-led equity funds on the continent. It is estimated that the financing gap for women businesses could be up to USD50 billion. We need to bridge that gap because the future is female.”