Launched in 2002, impact investment firm Investisseurs & Partenaires (I&P) is committed to contributing to the rise of a sustainable and dynamic private sector in Sub-Saharan Africa.
That is according to I&P investment officer Hugues Vincent-Genod, who says the company works exclusively with startups and SMEs in Sub-Saharan Africa and the Indian Ocean, since it believes these enterprises actively contribute to a sustainable and inclusive growth.
I&P’s investment thesis aims to answer the financing and support needs of SMEs in Africa’s “missing middle”, with the firm believing SMEs are facing three major obstacles that are impeding their growth. These are limited access to long-term finance, limited access to skills, and low governance and management practices.
“Despite these challenges, African SMEs have a key role to play for the development of the continent,” Vincent-Genod says.
“It is indeed acknowledged that these enterprises create sustainable employment for both qualified and unqualified workers, develop market-based solutions, improve access to essential goods and services, build and structure local economic fabrics, and contribute to political stability and social redistribution.”
I&P targets early-stage and growth stage startups, and has invested in 15 African countries since 2002. These have mostly been in West Francophone Africa, but also in Central Africa, the Indian Ocean and some English-speaking countries.
Its portfolio includes more than 60 SMEs in sectors such as microfinance, healthcare, agribusiness, and education, with I&P an investor in PAYG solar firm PEG Africa last year.
“As an impact investor, I&P endeavours to achieve economic, social, and governance impact through its investments,” says Vincent-Genod.
The company has African offices in Senegal, Ivory Coast, Burkina Faso, Ghana, Cameroon and Madagascar, and is about to launch a new office in Kenya. It looks to maximise its impact on five themes.
Vincent-Genod says these are promoting African entrepreneurship and contributing to the development of the private sector, ensuring better working and living conditions for African workers, reducing carbon footprint, ensuring integrity and good governance, and raising awareness about the dynamism of African entrepreneurship.
“We target SMEs with a potentially strong impact on their stakeholders: employees, clients, suppliers and distributors, local communities, and public authorities,” he says.
I&P’s IPDEV2 intiative, established in 2015, is the first network of African fund managers dedicated to early-stage and small growing businesses. IPDEV2 will incubate and sponsor 10 impact funds in 10 African countries over the next 10 years.
“Each fund will be managed by a first-time investment team supported by I&P and will invest equity and quasi-equity into 50 high-potential SMEs over 10 years,” Vincent-Genod says.
“Lean teams and high proximity will allow them to finance the neglected segment of early stage and small growing businesses with investment needs below EUR500,000 (US$540,000).”
Thanks to a strong leverage effect on local fundraising, IPDEV2’s network is also aiming to unlock EUR100 million (US$108 million) of African and international capital to finance 500 SMEs and directly create 15,000 formal jobs. Investors include large institutional funders such as the West African Bank of Development and private foundations such as the Lundin Foundation and Caritas.