Meet the Investor: Johanna Raehalme, Finnfund


Finnfund – the Finnish Fund for Industrial Cooperation – is a Finnish development financier and impact investor that offers long-term investment loans and venture capital to private companies for projects in developing countries. Disrupt Africa caught up with Johanna Raehalme, who is heading up the fund’s first regional office, which opens in Nairobi in May.

Raehalme, who started her career in investment banking and spent some eight years in private equity and consulting before joining the impact investing industry, said Finnfund’s new regional office would play a central role in strengthening its position in the East African market. 

“The location supports and streamlines the follow-up of the regional market and existing projects and collaboration with co-investors,” she said.

So how exactly does Finnfund – an investor in the likes of Twiga Foods, Kasha and Fuzu so far – operate? Raehalme says it is not a traditional startup investor, as it expects all its investments to be three things all at the same time – profitable, environmentally and socially responsible, and producing measurable development impact.  Its ticket size varies from EUR1 million to EUR25 million. 

“We see a lot of exciting tech companies emerging in the region and want to do our part in developing the sector. My team led the Series A fundraise of Kasha, which I think is a great example of how tech can support areas that are Finnfund’s core focus – in this case investing in businesses which boost women’s economic independence, entrepreneurship, leadership as well as their position and role in the marketplace,” she said.

Finnfund was founded in 1980, with the goal of financing joint ventures established and operating in developing countries by investing, granting loans, providing guarantees for loans, allocating funds to the formation of new businesses, and financing development banks operating in developing countries. Today, it has become an impact investor that invests up to EUR250 million (US$275 million) in 20–30 companies in developing countries each year. It is funded by the state of Finland, as well as private capital markets, with all profits recycled into new projects that drive sustainable development. 

Raehalme said Finnfund’s investments and commitments total over EUR1 billion (US$1.1 billion), with half of them in Africa. 

“My focus has recently been on investments in digital infrastructure and solutions. Digital connectivity is one of our focus areas and last year we provided a US$12 million senior loan to Bandwidth and Cloud Services Group (BCS), a telecom infrastructure provider operating in several African countries. With Finnfund’s help as a key project investor, BCS is expanding its operations in East, Central and Southern Africa. The project increases reliability, accessibility and affordability of the internet when compared to the alternatives,” she said.

“Also last year, we invested in Twiga, which operates a B2B e-commerce system to simplify the supply chain between fresh food producers, FMCG manufacturers and retailers. This removes the need for many intermediaries, significantly lowering the cost of food for consumers. And then of course Kasha, an e-commerce platform improving women’s access to genuine health, hygiene and self-care products in East Africa.”

Finnfund puts special emphasis on sectors that are critical to sustainable development: renewable energy, sustainable forestry, sustainable agriculture, financial institutions and digital infrastructure and solutions. 

“Within the tech space we have been recently very excited about solutions that increase access to financial services, internet access, especially rural connectivity, and e-commerce and logistics which have gotten a boost from COVID-19,” Raehalme said.

Assessment and development of responsibility are an essential part of Finnfund’s investment process. Investment has three criteria – profitability, responsibility and development impacts. 

“Each investment is assessed on the basis of these criteria before the investment decision, and the investment is assessed and monitored over the entire life cycle. Finnfund’s experts provide support for the companies in using best practices,” Raehalme said. “Finnfund’s funding is often catalytic because it helps projects raise additional commercial financing.”

In Africa, she said Finnfund sees tech-enabled solutions boosting growth in new sectors, and predicts great things in areas like agri-tech and e-health.

“We have done tech deals before, but in 2021 digital infrastructure and solutions was chosen as one of our focus sectors as we see that tech companies can contribute to solving many global challenges,” she said.

“Investor interest in Africa is definitely gaining momentum.”


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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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