Jacana Venture Partnership announced at the end of June its first investment in an African venture capital (VC) fund manager, InReturn Capital, an East African SME investment firm based in Kenya. SMEs are generally acknowledged as crucial motors for economic development in Sub-Saharan Africa, but access to finance is a major obstacle to their growth.
While international investors are increasingly interested in Africa, they are cautious about investing in SME funds managed by unproven managers. In the short term, argues Stephen Dawson, Impetus Trust co-founder and former chair, who now chairs Jacana, this investment is likely to come from the development finance institutions, foundations and individuals. ‘Our role in unlocking this potential,’ he says, ‘is to reassure those investors that we have thoroughly checked out our partners and have worked closely with them on all aspects of their operations so that we will only present to them “best in class” opportunities’.
Jacana mitigates investors’ risk by selecting high-quality teams and providing intensive support to local fund managers through its own team and a network of expert mentors – highly experienced private equity and venture capital professionals who can provide hands-on support to local teams. The capital invested in InReturn’s business will support the expansion of the team into Tanzania and Uganda. Jacana’s expertise, together with that of its mentors, will help InReturn to execute high-quality transactions, while its extensive contacts in Europe and North America will help raise additional capital from international investors.
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