Imagine raising $60 million to back female entrepreneurs in Africa when less than 2% of venture capital flows to women across the continent. That's exactly what Adesuwa Okunbo Rohdes accomplished with Aruwa Capital Management, one of Africa's few female-led growth equity funds specializing in gender lens investing.
From boarding school in the UK at age 11 to investment banking at JP Morgan, Adesuwa's path took a pivotal turn when she identified a crucial gap in the market: the severe underfunding of businesses led by or serving women across Africa. In 2019, pregnant with her first child, she took a leap that many called crazy – leaving the security of traditional finance to launch her own fund focused on backing women.
The timing couldn't have been more challenging. After securing their first investment, COVID hit, forcing a complete strategy pivot. "We had to tweak our fund structure, reduce our minimum ticket size, and prove ourselves over and over," she reveals. Through persistence and creativity, Aruwa mobilized capital from non-traditional sources, primarily women investors willing to trust a first-time fund manager over Zoom during a global pandemic.
Today, Aruwa's portfolio spans 13 companies across health, essential consumer goods, financial inclusion, and renewable energy – all either female-founded, female-led, or significantly benefiting women in their value chain. One standout success, Koolboks, provides solar-powered refrigeration for market women in off-grid areas. Since Aruwa's investment as their first institutional backer, they've grown revenue five-fold and expanded from Nigeria to 25 countries worldwide.
Beyond financial returns that exceed global benchmarks, Adesuwa's vision extends to transforming Africa's investment landscape. She advocates powerfully for mobilizing African institutional capital to fund African fund managers, arguing that Western investment models often fail to address the continent's unique realities. "Until we have more African pools of capital driving this discussion, there is no skin in the game to go beyond just ticking boxes," she explains.
Listen now to discover how persistence, purpose, and a deep commitment to gender equity can transform not just businesses, but entire economic systems. As Adesuwa puts it: "We don't need seats at the table. We need to create our own tables."
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
With more female entrepreneurs than any other
region in the world.
Women are at the heart ofAfrica's transformation.
Welcome to African BusinessStories, the show that amplifies
the voices of femaleentrepreneurs shaping Africa's
business landscape.
I'm your host, ekego Koye.
Here we explore bold ideas,strategies for scaling and the
(00:25):
realities of building businessesthat drive economic development
.
These stories will provideinsights into Africa's business
landscape, practical tools forgrowth and the inspiration to
navigate your ownentrepreneurial journey.
Be sure to subscribe, rate andshare.
Neuro journey.
(00:51):
Be sure to subscribe, rate andshare On the show.
Today I chat with AdeswaOkumbo-Rhodes, founder and CEO
of Arua Capital Management, oneof Africa's few female-led
growth, equity and gender lensfunds.
With over 15 years ofexperience in investment,
banking and private equity,including at JP Morgan, adeswa
has raised over $60 million toback businesses that are
(01:13):
female-led or provide criticalservices for women.
We talk about her journey fromNigeria to the UK, her
transition from banking toentrepreneurship, the challenges
of funding as a first-timefemale fund manager, and why
investing in women is bothimpactful and commercially
viable.
It's a conversation about grit,strategy and the future of
(01:36):
private capital in Africa.
Let's get into it, hi Adeswa.
Welcome to African BusinessStories.
Thank you for having me.
Thank you, I'm so glad that wecan finally get to have this
conversation.
I feel like I've been chasingyou for four years now.
Speaker 2 (01:52):
Thank you for your patience.
Yeah, thank you for having me.
It's been a bit busy.
Speaker 1 (01:56):
I know.
I know, and I'm actuallygrateful we didn't get to do
this interview in 2020, becauseyour story has become richer and
so there's a lot more to cover.
I guess this is the right timeto have this conversation.
Yes, everything happens at theright time, exactly.
I believe that strongly.
So, just starting at the verybeginning, where I normally like
to start, I know that you wereborn in Nigeria and you moved to
(02:20):
the UK when you were about 11,and I wonder what that
transition was like for you as apreteen.
Speaker 2 (02:27):
Yeah, no, it was really difficult actually at the
beginning Because I made twotransitions.
I transitioned from day toboarding school.
But, I also transitioned fromLagos, nigeria, to a small town
called Ramsgate in Kent.
So it was quite two differenttransitions being away from my
(02:49):
family to begin with, but thenjust being away from home and
being away from Nigeria.
So it was challenging in thebeginning.
I'm grateful that I hadsiblings, you know, although
they were in senior school and Iwas in middle school, so we
were kind of sick, but it was,you know, have them around
around which kind of gave somesense of reassurance that I
really really couldn't hack itand missed home.
(03:11):
I could run to senior schooland see my brother and sister,
which was nice.
But I think those were reallyformative years being away from
home, being away from securityblanket of, uh, mommy and daddy,
you're forced to be independent.
Uh, you're forced to bedisciplined, you're forced to do
your homework during prep time.
(03:31):
No one's coming to tell you todo it.
I think it instilled a level ofindependence that I'm very
grateful for and it instilled,maybe I would say, some maturity
as well, because I was put ayear forward, I was the youngest
in my class and being beingable to be surrounded with older
people, I think it brought thatmaturity early as well, and I
(03:53):
was always reaching for more andreaching for more than people
that were my age.
So I think those are very kindof formative years and I was
very proud that I remembercrying in my first six months
when I got there I want to goback home to Lagos.
And then at the end of sixthform I was the first black
female head of school in thecompany, in the sorry in the
(04:15):
school's 100 year history.
So it just shows that there wasa journey of growth, the journey
of maturity, and I wouldn'ttrade it for anything looking
back on it now, and I even wantmy children to go to boarding
school because I think itteaches you a lot of formative
lessons for your future life.
Speaker 1 (04:32):
So yeah, I totally agree.
I totally agree with that.
And were there any earlyinfluences that shaped your
interest in finance?
Speaker 2 (04:41):
Yeah, so I would say that I remember when I was doing
my research on markets anddoing my research on the economy
.
So I've been someone that'sbeen very interested about how
money works and how money playsa role in our kind of day-to-day
global market.
Because my name is Adesua, itactually means center of wealth,
(05:04):
so I think when my mom named me, it was really proclaimed from
God that I would manage money.
Speaker 1 (05:10):
Wow, I like that.
Speaker 2 (05:11):
But I was always interested in how money worked
from a very young age.
I remember in school, when Iwas here in Nigeria, I used to
sell lyrics Really Make money.
Yeah, so I would go to schooland I'll print out all the
latest songs and people used tobuy lyrics wow I was thinking
back on that the other day and Iwas like, wow, I've always had
this entrepreneurship bone in mybody.
(05:34):
So, yeah, I think it was justthat fascination with being able
to make money, being able tocreate wealth and seeing how you
could do that at scale.
So that's what.
That's why I wanted to studyeconomics.
That's why I got a very keeninterest for investment banking,
because I remember doing it insixth form, going to a Goldman
Sachs career day and there wasthis amazing Indian woman that
(05:56):
stood in front of us.
That was so smart, impactivelydressed, was so eloquent, so
coherent, and she was talkingabout what she did and I was
like, wow, imagine if you canhave women and people of color
at these type of positions.
It's something that I hadn'tseen before and obviously
Goldman were one of the topinvestment banks at that time.
So that kind of piqued myinterest and made me fascinated
(06:19):
about investment banking andwanting to do more investment
banking and wanting to do more.
And that's what led me to doeconomics and what led me to
have interest for an internshipat Lehman Brothers in my first
year of university and then,obviously, get the internship
with JP Morgan in my final yearof university.
(06:40):
Yeah, I would say that interestin money and interest in how
finance makes the world goaround is something that pushed
me to economics and, ultimately,investment banking.
Speaker 1 (06:53):
Yeah, I thought it was interesting that you were
doing an internship in yourfirst year.
Normally, first year of uni,people are just having fun and
settling in, but you werealready so focused and you had
an internship.
How did that come?
Speaker 2 (07:06):
about it was it was not done right.
Internships are typically donein your second or your third
year, correct, like, but I did.
I went to a spring week atlehman brothers and I managed to
get the information of the hrlady and I just didn't let her
rest.
I didn't let her rest, I senther my CV it was persistent, I
(07:27):
would update her and I was like,really love to do an internship
and please interview me and letpeople interview me and just
see.
And I think she just admiredthat determination and admired
that, that persistence that sheinvited me for interview and the
people that interviewed mewanted me on their team.
So so yeah, I think my careerhas always been like that.
(07:48):
It's just been the favor of Godopening doors, and I think it's
also that my character.
I just don't take no for ananswer so I think people that
are in senior positionstypically resonate with that and
they like the persistence andthey like the grit and the
resilience.
And then you know, god does therest that's fantastic.
Speaker 1 (08:09):
So you went on to to do that internship, you did
another one at jp morgan andthen you took a break.
You took a gap year.
So talk us quickly through thatgap year, then we will.
We'll jump into your move backto the continent yeah.
Speaker 2 (08:25):
So in that gap year I did the.
I did my JP Morgan internshipin my third year and I got the
full-time offer, thank god.
And then I said to my dad I'vegot in the full-time offer in my
dream job.
Why am I going to go do amaster's?
Because I had a place atCranfield to go and do finance
and management.
And I was like I'm not going todo this master's, I already
(08:47):
have the dream job.
I'd rather explore otherinterests in this year out.
And my dad was like what areyou talking about?
Go and do your master's.
I was like, seriously, I'm notdoing this master's.
I value work experience overtheory.
So in that year out, what I didwas I worked in a private
equity firm called TLG Capital,and that's really where I
(09:10):
started to really understandwhat impact investing on the
continent really meant.
Because we did a deal in Ugandaa local manufacturer of
antiretroviral and antimalariadrugs and it was a very
successful investment for us,and I wasn't an entrepreneur
back then.
So I put a little bit of moneyof my personal money in as well
(09:30):
and made a very attractivereturn.
But at the same time, we sawpeople's lives being improved by
genuine access to genuinemedicines for malaria, for HIV.
So it was the first time that Isaw that in the Africanan
continent you can invest andmake money whilst also improving
people's lives at the same timeright so when I saw that, I was
(09:52):
like, oh wow, this isinteresting.
I'd like to do this back home innigeria, but at the time I
didn't know how.
I just thought, you know, thisis something that will happen
later in the future.
So so in that year out I didthat.
I also spent some time in Spainlearning Spanish, because I'd
done Spanish at school and it'sa language that I always loved.
(10:12):
So I spent some time in Spainlearning Spanish and then, after
that year was done, I startedfull time at JP Morgan in M&A in
the in the London.
So yeah, I'm very grateful thatmy father eventually allowed me
to take that year out, becauseit was really the birth of what
would become later my love forthe continent and investing in
(10:34):
the continent.
Speaker 1 (10:35):
That's beautiful.
So how many years were you atJP Morgan?
Speaker 2 (10:38):
So I was there for about four years just under four
years.
I started in the M&A team andthen I moved to the leverage
finance team and I had theprivilege of being in different
sector teams as well.
So I was in the industrialsteam, I was in the consumer
health care and retail team andthen the leverage finance team,
where I was also able to work ontransactions in emerging
(10:59):
markets, including Nigeria.
So I I got a very, reallywell-rounded experience at JP
Morgan, which I'm very gratefulfor.
Speaker 1 (11:07):
And then came this opportunity with Syntaxis
Capital to move to the continent.
Yes, yeah, so tell us a bitabout that.
This was not investment banking.
Speaker 2 (11:17):
No, this was not investment banking.
So they are.
They were a private equity fund, private equity and credit fund
.
They're based in Eastern Europe, based in Central and Eastern
Europe, and they had seen a lotof the trends that we were
seeing in Africa 15 yearsearlier in Central and Eastern
Europe.
So they're already successfullymerging market investors.
So they had hunted me to helpthem set up their Africa
(11:40):
business.
So I did that.
For about five years, we were onthe road for a fund and it was
during that five years that Ireally started to see the gaps
in the market in terms offunding for women, in terms of
funding for SMEs.
During that time, there wasless than 10 funds in the whole
of Africa that were femalefounded and female managed.
(12:03):
There was less than 2% ofcapital going to female
entrepreneurs and at the time,there was about an 80 billion
funding gap for SMEs in Nigeriaand in Ghana.
So when I saw those disparities, that's really what started to
birth the hunger for doingsomething of my own where we
would specifically focus onplugging the gaps for women,
(12:26):
because I was struggling tofundraise as the face of this
African fund, but I saw numerousfunds around me that were male
led getting capital and raisingcapital and scaling their funds.
So I thought, if we don't Ialways say that we don't need
seats at the table, we need tocreate our own tables.
I said with Arua we'll createour own table.
(12:47):
We will mobilize capital fromnon-traditional sources, so not
the DFIs and the traditionalinstitutional investors that
typically invest in funds.
We will mobilize local HNI,local family office capital to
do our first deals and then, aswe have a robust portfolio
that's validating the strategy,the institutional investors will
(13:08):
come.
And that's exactly whathappened In 2019,.
I spun out of Syntaxis Africa.
I was 29 years old.
I was five months pregnant.
Speaker 1 (13:19):
No way.
Speaker 2 (13:20):
A lot of people thought I was crazy.
They were like you haven'traised the fund, just go back to
jp morgan.
But I felt a strong sense ofpurpose.
I felt a strong sense ofconviction in what, in the gaps
that I had seen.
So I took that kind of boldleap of faith on the road less
travel to set up.
I remember a capital in 2019,july 2019.
(13:41):
We were able to mobilize somecapital from friends and family
to do our first investment inOctober 2019.
And this was in a companycalled Wemi Industries, their
local manufacturer of a range ofhygiene goods, including
sanitary pads for women.
And then we thought, okay,we've arrived.
I've arrived.
Now that we've done our firstdeal, the money will pour in.
And then hit.
(14:02):
And then covid hit all thoseconversations we were having
retreated and we had to startfrom scratch.
So that's when we started tomobilize local capital, put
people in spvs, reduce myminimum investment size, and the
rest is history.
I'm very grateful to a lot ofwomen that invested in Arua
(14:24):
during that time, that investedin parted ways with their
capital over Zoom.
So it was those investors thatenabled us to do our first five
investments and the thesis waswe're going to showcase that by
having more women allocatingcapital.
There's natural trickle-downeffects to women in your
portfolio.
There's natural trickle-downeffects to women in your
portfolio.
There's natural trickle-downeffects to gender diversity in
(14:45):
your portfolio, and this willenhance our returns.
But not only that.
It will also ensure that thereis significant social impact
because of the role that womenplay in our society, in Africa
as well.
Speaker 1 (14:59):
But what were those initial conversations like?
How did you see yourselftweaking your pitch at each?
Speaker 2 (15:06):
point.
I had to tweak my pitch atseveral points because in COVID,
people were very what's theword I'm looking for protective
of their capital.
The world was falling down.
People didn't know what wasgoing to happen.
Our pitch was this is a way todiversify your investment
portfolio.
This is a way to diversify yourinvestment portfolio.
This is a way to generatesocial impact.
(15:29):
Women are not getting enoughcapital.
We need to come together toinvest in our women.
But a lot of people had got intheir hands burned with private
equity in the past.
Right, because unfortunately,private equity in Africa
historically has not reallylived up to the return promises
of the African rising narrative15 years ago that everyone
jumped on.
So we had to tweak our fundstructure.
(15:49):
We had to tweak our fundeconomics.
We had to really proveourselves that we could identify
these businesses, we couldinvest in them, we could return
capital to give people comfort.
We had to reduce our minimumticket size.
So I always say that if you're afirst time fund manager and you
(16:09):
have a fund ticket size of$500,000, good luck.
So we had to make a lot oftweaks, but there were so many
no's, so many no's, so many no'syou don't even want to know the
hustle and grind and grit thatit took during COVID Multiple
Zoom pitches pitching to angelinvesting clubs, pitching to
women investing clubs, pitchingto groups of friends to come
(16:32):
together into SPVs.
So yeah, it was a lot of.
It was a lot of work and, yes,a lot of no's and a lot of
rejection, but thank God we gotthere in the end rejection, but
thank God we got there in theend.
Speaker 1 (16:47):
That's incredible.
So you've managed to grow AruaCapital to I think your assets
under management last time Iread was $60 million, correct.
What do you think are some ofthe key strategies that you use
to increase and maintaininvestor confidence?
Speaker 2 (17:01):
Yes.
So I think for us, we are justvery intentional about being
consistent with our strategy.
From our inception, we set outto create a gender lens platform
where we can showcase that ifyou invest in women as capital
allocators, there's that naturaltrickle-down effect to women in
(17:22):
our portfolio and with fund one, we did what we were going to.
We did what we said we weregoing to do.
Fund one we were able tomobilize capital from local
investors and h and i's andfamily offices globally to begin
with.
We then got the attention ofvisa foundation, which anchored
our first fund with a fourmillion dollar investment.
(17:43):
We then got MasterCardFoundation.
We then got FSD Africa.
So I think with Fund One, itwas really about gaining the
trust of investors to invest inyou as a person.
And now with Fund Two, wherewe've actually doubled and
hopefully will triple our sizeof Fund One, the reason that
(18:03):
we've been successful in scalingis because we were consistent
in our strategy.
We said we were going to dosomething and that's what we did
17% of our portfolio of FundOne.
We said that we were going toinvest for commercial returns
and social impact.
Our Fund One returns are aboveglobal benchmarks when you
compare it to other 2019vintages across the world.
(18:26):
So I think that also has givenour investors a lot of
confidence.
We said we're going to investand create jobs.
Our fund one is supporting175,000 directed indirect jobs
indirect jobs.
So these are just somehighlights that I've pulled out.
That has given people that arenow looking at Fund 2, that are
(18:47):
moving away from me as a personalone but now looking at the
results to see.
Okay, what has Fund 1 done?
Have you validated theinvestment strategy?
Have you been consistent withyour investment strategy?
So I think those are some ofthe things that have helped us
scale from 20 to now 60 andhopefully to even more when we
(19:08):
reach a final close of oursecond fund.
Speaker 1 (19:17):
That's fantastic in female-led businesses and also
female-focused, because I knowthat your first investment,
Waymi, it's not female-led, butthey make hygiene products which
serve women, which I think is agreat way of framing the gender
lens financing.
So what are some key criteriasyou look at in the businesses
you invest in?
Speaker 2 (19:39):
Yeah.
So for us, we want to invest inde-risked business models.
So the majority of our fundwill be investing in businesses
that have proven their businessmodel.
They've been operating for atleast two years and they have a
minimum of at least $500,000 ofrevenue things that we look at.
(20:05):
We also want businesses withstrong profit margins and EBITDA
margins.
We want businesses that haveshowcased kind of strong
historical growth as well.
And then, for our gender lenscriteria, we want businesses
that are either female founded,female led, or could be male
founded or male led, but aportion, a significant portion,
of their value chain isbenefiting women, and that could
(20:26):
be, for example, we have abusiness in our portfolio called
Omni Retail, where they areservicing over 140,000 retailers
where 75% of them are women.
That's the type of, that's thetype of value chain impact that
we want to see, if it's nottypically a female-founded or a
female-led business.
(20:46):
Or it could be like WEMI thatyou mentioned, where they're
providing goods and servicesthat improve women's lives.
So that's really the criteria.
And then when you add oursector focus as well, where we
want to invest in necessities,so we don't want to invest in
nice-to-haves, we want to investin necessities, so we don't
want to invest in nice-to-haves.
We want to invest in health.
(21:07):
We're investing in essentialconsumer goods like food.
We're investing in financialinclusion and fintech.
We're investing in access topower through renewable energy.
So these are really the keythings that we're looking for as
we screen investmentopportunities.
Speaker 1 (21:24):
How many companies do you have in your portfolio
today?
Speaker 2 (21:26):
So, across both Fund 1 and Fund 2, we have 13
companies.
Speaker 1 (21:33):
And I'm sure there are many success stories, but is
there one that is like astandout?
Not that I'm making you pick,but is there one that's like a
standout Just showing the impact?
Or, from the impact point ofview, what's your investment,
how you've seen your investmentgrow, this particular business,
and where they are todaycompared to when you first
invested in them?
(21:53):
Just one example would justgive color to the conversation
we're having.
Speaker 2 (21:58):
Yeah, so there are many examples, because we did
some analysis on our portfoliothe other day and we saw that
across our fund one, thebusinesses that we've invested
in have grown by 22 timescompared to when we first
invested.
So the capital we provide isvery transformative to these
businesses.
But if I had to pick I don'tlike to pick because it's like
(22:19):
picking your children, I know.
But if I had to pick, I'llprobably give the example of a
cool box.
So, cool box, they providesolar-enabled refrigeration for
market women, predominantly inoff-grid areas.
So if you don't have access topower, you don't have access to
(22:40):
electricity and you're sellingcold drinks or frozen fish or
frozen meat, you typically haveto throw your meat or fish away.
So with our product, they canhave electricity and power for
up to four days as long as theyhave access to the sun.
So when we invested in thisbusiness, we were the first
institutional equity investor inthe business in 2021.
(23:03):
Since then, they've grownrevenues by more than five times
.
They've been able to provideelectricity to over 3,000 micro
SMEs and off-grid areas, whereover 70% of those are
women-owned, and we've been ableto help them attract five times
more funding than when weinvested at significant uplift
(23:26):
in terms of valuation to what weinvested at, and now that
company from just servicingNigeria is now selling its
product in 25 countries aroundthe world Fantastic.
So it just gives you an idea ofthe type of journey that the
companies that we invest in goon through our capital capital
(23:48):
where we're able to spot themearly, provide them with the
capital that they need and thenwe're able to get them to a
stage where larger investors,larger strategic investors are
able to scale them even further.
So I'd say cool box isdefinitely one of the success
stories of our fund.
It it's a female foundedbusiness.
The management team is over 50%women and over 70% of their
(24:12):
customers are women as well, soit's really gender lens
investing at its best.
Speaker 1 (24:16):
That is just incredible, because you know
that I was my follow on questionwas going to be about expansion
outside of their initialmarkets, but you've already
covered that with this example.
There's someone else I saw onyour portfolio list, taylor.
Yes, I interviewed her manyyears ago Well, I say many,
about three years ago or so andit's so incredible.
(24:38):
I caught up with her inSeptember of last year and it's
incredible to see how much she'sgrown and been able to attract
funding.
And I just wonder so, beyondfinancial capital, what other
forms of support does Arua offerto your portfolio companies?
Speaker 2 (24:57):
Yeah, and so actually it's great that you mentioned
Taylor, because what we see witha lot of our investees,
including Taylor, is that we canoften help them strengthen
their finance function becauseentrepreneurs, they've been very
focused on growing the top line.
They've been very focused onscaling, entering new markets,
(25:18):
entering new, getting customers.
But sometimes they forget someof the details in finance.
So helping them implement anERP, helping them implement an
accounting system to help themtrack what is my profitability
per SKU?
What is my, how are my costsper unit moving on a weekly
basis, getting into those veryclear operational and financial
(25:40):
KPIs can help you, when you haveinvestment, make better
informed decisions which, whereshould you be putting your
working capital?
Which SKU should you beexpanding?
So helping them with theirfinance function is something
that we do.
We typically help implement anERP, we typically help bring in
a CFO.
Another thing that we do is wehelp with capital raising, so
(26:04):
helping them secure that nextround of capital.
So over 50% of our businesseshave gone on to raise larger
pools of capital about 18 to 24months after we invest.
So we're able to leverage ourrelationships to ensure that
they get subsequent rounds ofcapital to help them scale.
(26:24):
And then another thing we helpwith is governance.
We make sure that we'reinstitutionalizing these
businesses.
We always sit on the boards ofthese businesses putting in the
right corporate governance inplace so that when larger
investors come in, a lot ofthese structures are already in
place and they don't have tostart from scratch.
So those are just some of thequick wins that we try and do,
(26:47):
and because we're here in Lagos,we're close to our founders.
Having that proximity to ourfounders means that we can
really add value in a meaningfulway.
Speaker 1 (26:56):
We see a lot of growth and activity in Nigeria
and West Africa specifically.
Have you had any experiencebroadly more Pan-African and how
do you see the market forfemale-led businesses beyond
West Africa?
Speaker 2 (27:11):
Yeah, so obviously Nigeria is the biggest market.
It's one of the biggestrecipients of venture capital
and private equity activity, butalso Kenya and South Africa and
Egypt are also seeing a lot ofventure capital and private
equity activity.
But if you look at the recentresearch that just came out, the
(27:32):
picture is stark everywhere forfemale founders, unfortunately.
So, the same way that in Kenya,the same way that in Egypt, the
same way that in South Africa,female founders are just not
getting enough capital.
So the research was actuallydone on a Pan-African basis and
it showed that less than 2% ofcapital is going to female
(27:53):
startups across the continent.
So, unfortunately, I don'tthink that there is any part of
the continent that is immunefrom this ecosystem challenge of
underfunding to female-ledbusinesses, and that's why I
always say that a vision forArua is yes, we want to
(28:13):
obviously conquer the NigerianGhana market to begin with, but
over the long term, this is aPan-African vision, because
other parts of the continent arealso suffering from this
problem of underfunding to women.
Parts of the continent are alsosuffering from this problem of
underfunding to women.
So over time, we hope to expandto other parts of the continent
(28:35):
where we will have officesoutside of Nigeria and we will
also have other asset classes aswell that will be addressing
this issue.
Speaker 1 (28:42):
In addressing this issue.
I've listened to a lot of theconversations you've had over
the years and you'veconsistently spoken about having
women as capital allocators inthis process to help increase
the flow of capital to women-ledbusinesses.
And I just wonder, diswa, interms of other things that can
be done beyond women being atthe table or building their own
(29:05):
tables, are there any otherstructural barriers that can be
addressed or should be addressedto deal with this challenge?
Speaker 2 (29:13):
Yeah, so I think you've said it women being
capital allocators is one, butthen I think it's also just
amplifying the success storiesso that men can adopt gender
lens investing strategies aswell.
It's not only for women to do.
How can we amplify the successstories of the female-led
businesses that have done reallywell, that have scaled, that
(29:36):
have gone on to generate veryattractive returns for their
investors?
Yes, one, we need women capitalallocators, but we also need to
be very intentional aboutamplifying the success stories
of gender lens investing.
I think that's something thatwe try to do at Arua, but we
need more people to do that toshowcase how has having a gender
(29:58):
diverse board improved yourprofitability?
How is having a majority femaleled management team?
How is that driven revenuegrowth?
How has that driven revenuegrowth?
(30:34):
And let's equity and venturecapital industry by western
governments?
So I think that until that shifthappens, where more african
pools of capital are fundingAfrican fund managers, there
will not be enough capitalflowing to women, both as
capital allocators and both asentrepreneurs, because I feel
(30:57):
very strongly that what hasworked in the West for a private
equity and venture capitalmodel is not necessarily
importable to our context.
So the 10 plus 2 model is notworking.
So if you've looked at privateequity in Africa, returns over
the last decade, it will tellyou that story.
(31:19):
But because we do not haveAfrican pools of capital driving
this discussion, there is noskin in the game to go over and
above just ticking the boxes.
So until we start to utilizethe $25 billion of pension
assets $25 billion, by the way-of assets that we have in
(31:41):
Nigeria alone and start addingour capital to this conversation
.
I think that is a very systemicand structural barrier that is
not moving our industry forward.
So that's why, for us, we arereally trying to showcase
through our track record that wewant our track record to speak
(32:02):
for itself so that more localinstitutional investors, like
the pension funds, like theinsurance companies, the
sovereign wealth funds, can beconfident in starting to put
some of their capital intoAfrican fund managers like us,
because I think until we do that, we will not have enough aruas,
(32:23):
we will not have enough poolsof capital that are
intentionally trying to solveAfrican issues.
So that's a bit of acontroversial one, but I always
try and slip that in as well.
Speaker 1 (32:34):
It's very welcome.
This is actually probably thethird or fourth time I've had a
conversation around thisparticular issue the idea that
only African capital can buildAfrica, and what does that
actually look like?
And so, yes, I'm glad that youthrew that in there, and it
should.
Just, we need controversialconversations right now for us
to move the dial.
Speaker 2 (32:55):
We've seen the world closing in right USAID tariffs,
america first.
So we should start thinkingalong those lines and start to
try and be self-sufficientacross all of our industries.
Speaker 1 (33:08):
I agree, and even recently, I wanted to get your
take on the recent MasterCardwithdrawal of their commitment
to 54 Collective.
And just in light of that, andwhat we're talking about, what
do opportunities going forwardlook like with partnering with
global investors?
Speaker 2 (33:26):
Yeah.
So I can't speak to that becauseI don't know all the details of
the MasterCard duration, but Ithink it just points to we need
a more diverse pool of capitaland I think that goes to the
fact that if we have moreAfrican-American institutional
investors we're very glad tohave Bank of Industry become one
(33:46):
of our LPs in Fund2.
If we have more investors thathave boots on the ground here,
understand the local nuances,understand the local context, we
will be able to drive some ofthose discussions to suit what
is the reality on the ground,because I think that a lot of
(34:07):
Western organizations come withpreconceived ideas of things
that may have worked in the Westbut may not necessarily be
importable to our reality.
So by having more Africaninstitutional investors that
live here, that understand thenuances that are here with us on
the ground, then we'll start tobuild tailored solutions to fix
(34:31):
the very nuanced problems thatwe face every day as a continent
.
So I think that's really it iswe need to design differently.
And to design differently youneed desert skin in the game.
Fortunately, a lot of theWestern global organizations may
not necessarily have the skinin the game because they're not
living through the issues likeus on a daily basis.
(34:52):
So that's really what I have tosay for that.
Speaker 1 (34:55):
Thank you for that.
So I know that you're currentlyworking towards the final close
of FON2.
And I was just wondering whatexcites you about the next phase
for Arua Capital.
Speaker 2 (35:05):
Yeah.
So what excites me is we'reobviously growing as a firm,
we're growing the team, we areonboarding more companies into
our ecosystem and really justbeing able to see the journey of
some of our early investmentsas well and starting to exit
some of those and starting toreally not only validate our
(35:26):
investment strategy on paper butalso have some realized exits.
I'm very excited for that phaseas well, because I think the
proof is in the pudding, as theysay.
So we're entering into a phasenow where we're going to be
exiting some of our portfoliofrom fund one.
We're entering into a phase nowwhere, with the new capital we
have in fund two, we're going tobe birthing a new generation of
(35:48):
Arua portfolio companies.
It's a very exciting timebecause we're ending one story
and starting another one andexpanding the team as we do it
and also welcoming new types ofinvestors into our ecosystem as
well that have just joined us inthe journey for fun too.
So, yeah, it's a very excitingtime for us at arua.
(36:10):
It's a busy time but it's onethat that has really shown just
how far we've come from fromcovid, when it was a very
difficult time, but to now see afully developed ecosystem
around us, different pool ofinvestors, different types of
companies, it's really.
I'm really grateful to be partof the journey and to witness
(36:31):
just the evolution of Arua.
So, yeah, grateful to God forwhere he's brought us.
Speaker 1 (36:36):
That's amazing.
This has been quite aninsightful conversation and,
like I said in the beginning,I'm happy that I waited.
It's exciting to see the workthat you're doing and the impact
that you're having and alsojust demonstrating that these
companies are commerciallyviable and excited to see what
the next phase looks like.
In wrapping up, I normally askmy guests to do two things to
(36:59):
reflect and to give advice.
Reflection is just anopportunity for you to tap
yourself on the back and say I'mproud of me.
So, just looking back at yourcareer and what you've been
building over the last six years, what would you say has been
your proudest moment at this one?
Speaker 2 (37:16):
oh, gosh, what has been my proudest moment?
I would say the final clays offun.
One was a very proud momentbecause it had taken me about
nine years to get to that point.
Right, haven't tried to raisemy first fund with Syntaxis for
five years and then three and ahalf years trying to get to a
(37:38):
final close of Arua.
Being able to get to a finalclose of Arua having spun out
people thought I was crazy.
They're like, oh, you're nevergoing to raise a fund, just go
back to JP Morgan and collectyour salary.
So that was a very proud moment,because it was just years of
rejection, years of delay, yearsof setbacks.
(37:59):
So that was a very proud momentfor sure.
Another proud moment, though,was when we got to a first close
of Funtune.
We launched Funtune in November2023, just after I had my
second son, and within sevenmonths, we got to a first close
of that was bigger than the sizeof Fon1.
(38:20):
So that was another proudmoment where it just showed that
delay is not denial.
Everything is meant to happenas it should.
So, yeah, I'm just reallygrateful for the journey.
I'm very proud of how far we'vecome as a team and and yeah, we
have so much more to do, so myreflection is one of just
(38:41):
immense gratitude and immensepride in in everything that
we've achieved thank you so muchfor that, and if you could give
one piece of advice to otherwomen who are building
businesses in Africa, what wouldthat be?
My advice would just be keep atit.
Keep at it.
Majority of success ispersistence.
(39:02):
Majority of success is beingthe last person standing.
So there will be no's, therewill be setbacks, there will be
delays, but let your purpose,let your why fuel that
determination, fuel thatpersistence, and it will happen.
So I hope that my story canmotivate, my story can inspire.
(39:25):
It took close to nine years forme to get to a final close of
Fund one and for me tosuccessfully raise an
institutional fund.
So I think just that that thatpersistence is very necessary to
succeed.
So my advice is know your why.
Always go back to it and tryand do something that's more
(39:46):
than you, because that's whatwill keep you going.
If you're just building formoney or building for status or
building for recognition, youwill quit in those difficult
times.
I think why I was able to go aslong as I did was because I
knew that if I was successful,that would really transform the
landscape, and I'm very gladthat more and more women now are
(40:09):
starting to raise their ownfunds because they've seen that
it's possible through what we'vedone.
So that would be my advice isjust to be persistent and make
sure that your story is morethan just you, so that it will
give you the feel to keep ongoing.
Speaker 1 (40:25):
That's fantastic.
Thank you so much for that.
So where can people learn moreabout Arua Capital?
Speaker 2 (40:32):
Please go to our website, wwwaruacapitalcom, and
you can also follow me onLinkedIn.
Follow our company page onLinkedIn.
We're very active on socialmedia so, yes, you should be
able to follow us on all thesocial media platforms.
Speaker 1 (40:48):
Thank you so much, Adeswa.
This has been a greatconversation.
Speaker 2 (40:52):
Thank you.
Thank you so much for having me.
I'm really glad that we hadthis conversation and it's
amazing what you're doing,highlighting different business
stories on the continent, sothank you for having me.
Thank you.
Speaker 1 (41:03):
Thank you so much for listening.
If you're not alreadysubscribed, please do so on
Apple, spotify or wherever youget your podcasts, and don't
forget to leave us a review sowe know how we're doing.
I'm Akego Okoye and you havebeen listening to African
Business Stories.
With more female entrepreneurs than any other
region in the world.
Women are at the heart ofAfrica's transformation.
Welcome to African BusinessStories, the show that amplifies
the voices of femaleentrepreneurs shaping Africa's
business landscape.
I'm your host, ekego Koye.
Here we explore bold ideas,strategies for scaling and the
(00:25):
realities of building businessesthat drive economic development
.
These stories will provideinsights into Africa's business
landscape, practical tools forgrowth and the inspiration to
navigate your ownentrepreneurial journey.
Be sure to subscribe, rate andshare.
Neuro journey.
(00:51):
Be sure to subscribe, rate andshare On the show.
Today I chat with AdeswaOkumbo-Rhodes, founder and CEO
of Arua Capital Management, oneof Africa's few female-led
growth, equity and gender lensfunds.
With over 15 years ofexperience in investment,
banking and private equity,including at JP Morgan, adeswa
has raised over $60 million toback businesses that are
(01:13):
female-led or provide criticalservices for women.
We talk about her journey fromNigeria to the UK, her
transition from banking toentrepreneurship, the challenges
of funding as a first-timefemale fund manager, and why
investing in women is bothimpactful and commercially
viable.
It's a conversation about grit,strategy and the future of
(01:36):
private capital in Africa.
Let's get into it, hi Adeswa.
Welcome to African BusinessStories.
Thank you for having me.
Thank you, I'm so glad that wecan finally get to have this
conversation.
I feel like I've been chasingyou for four years now.
Speaker 2 (01:52):
Thank you for your patience.
Yeah, thank you for having me.
It's been a bit busy.
Speaker 1 (01:56):
I know.
I know, and I'm actuallygrateful we didn't get to do
this interview in 2020, becauseyour story has become richer and
so there's a lot more to cover.
I guess this is the right timeto have this conversation.
Yes, everything happens at theright time, exactly.
I believe that strongly.
So, just starting at the verybeginning, where I normally like
to start, I know that you wereborn in Nigeria and you moved to
(02:20):
the UK when you were about 11,and I wonder what that
transition was like for you as apreteen.
Speaker 2 (02:27):
Yeah, no, it was really difficult actually at the
beginning Because I made twotransitions.
I transitioned from day toboarding school.
But, I also transitioned fromLagos, nigeria, to a small town
called Ramsgate in Kent.
So it was quite two differenttransitions being away from my
(02:49):
family to begin with, but thenjust being away from home and
being away from Nigeria.
So it was challenging in thebeginning.
I'm grateful that I hadsiblings, you know, although
they were in senior school and Iwas in middle school, so we
were kind of sick, but it was,you know, have them around
around which kind of gave somesense of reassurance that I
really really couldn't hack itand missed home.
(03:11):
I could run to senior schooland see my brother and sister,
which was nice.
But I think those were reallyformative years being away from
home, being away from securityblanket of, uh, mommy and daddy,
you're forced to be independent.
Uh, you're forced to bedisciplined, you're forced to do
your homework during prep time.
(03:31):
No one's coming to tell you todo it.
I think it instilled a level ofindependence that I'm very
grateful for and it instilled,maybe I would say, some maturity
as well, because I was put ayear forward, I was the youngest
in my class and being beingable to be surrounded with older
people, I think it brought thatmaturity early as well, and I
(03:53):
was always reaching for more andreaching for more than people
that were my age.
So I think those are very kindof formative years and I was
very proud that I remembercrying in my first six months
when I got there I want to goback home to Lagos.
And then at the end of sixthform I was the first black
female head of school in thecompany, in the sorry in the
(04:15):
school's 100 year history.
So it just shows that there wasa journey of growth, the journey
of maturity, and I wouldn'ttrade it for anything looking
back on it now, and I even wantmy children to go to boarding
school because I think itteaches you a lot of formative
lessons for your future life.
Speaker 1 (04:32):
So yeah, I totally agree.
I totally agree with that.
And were there any earlyinfluences that shaped your
interest in finance?
Speaker 2 (04:41):
Yeah, so I would say that I remember when I was doing
my research on markets anddoing my research on the economy
.
So I've been someone that'sbeen very interested about how
money works and how money playsa role in our kind of day-to-day
global market.
Because my name is Adesua, itactually means center of wealth,
(05:04):
so I think when my mom named me, it was really proclaimed from
God that I would manage money.
Speaker 1 (05:10):
Wow, I like that.
Speaker 2 (05:11):
But I was always interested in how money worked
from a very young age.
I remember in school, when Iwas here in Nigeria, I used to
sell lyrics Really Make money.
Yeah, so I would go to schooland I'll print out all the
latest songs and people used tobuy lyrics wow I was thinking
back on that the other day and Iwas like, wow, I've always had
this entrepreneurship bone in mybody.
(05:34):
So, yeah, I think it was justthat fascination with being able
to make money, being able tocreate wealth and seeing how you
could do that at scale.
So that's what.
That's why I wanted to studyeconomics.
That's why I got a very keeninterest for investment banking,
because I remember doing it insixth form, going to a Goldman
Sachs career day and there wasthis amazing Indian woman that
(05:56):
stood in front of us.
That was so smart, impactivelydressed, was so eloquent, so
coherent, and she was talkingabout what she did and I was
like, wow, imagine if you canhave women and people of color
at these type of positions.
It's something that I hadn'tseen before and obviously
Goldman were one of the topinvestment banks at that time.
So that kind of piqued myinterest and made me fascinated
(06:19):
about investment banking andwanting to do more investment
banking and wanting to do more.
And that's what led me to doeconomics and what led me to
have interest for an internshipat Lehman Brothers in my first
year of university and then,obviously, get the internship
with JP Morgan in my final yearof university.
(06:40):
Yeah, I would say that interestin money and interest in how
finance makes the world goaround is something that pushed
me to economics and, ultimately,investment banking.
Speaker 1 (06:53):
Yeah, I thought it was interesting that you were
doing an internship in yourfirst year.
Normally, first year of uni,people are just having fun and
settling in, but you werealready so focused and you had
an internship.
How did that come?
Speaker 2 (07:06):
about it was it was not done right.
Internships are typically donein your second or your third
year, correct, like, but I did.
I went to a spring week atlehman brothers and I managed to
get the information of the hrlady and I just didn't let her
rest.
I didn't let her rest, I senther my CV it was persistent, I
(07:27):
would update her and I was like,really love to do an internship
and please interview me and letpeople interview me and just
see.
And I think she just admiredthat determination and admired
that, that persistence that sheinvited me for interview and the
people that interviewed mewanted me on their team.
So so yeah, I think my careerhas always been like that.
(07:48):
It's just been the favor of Godopening doors, and I think it's
also that my character.
I just don't take no for ananswer so I think people that
are in senior positionstypically resonate with that and
they like the persistence andthey like the grit and the
resilience.
And then you know, god does therest that's fantastic.
Speaker 1 (08:09):
So you went on to to do that internship, you did
another one at jp morgan andthen you took a break.
You took a gap year.
So talk us quickly through thatgap year, then we will.
We'll jump into your move backto the continent yeah.
Speaker 2 (08:25):
So in that gap year I did the.
I did my JP Morgan internshipin my third year and I got the
full-time offer, thank god.
And then I said to my dad I'vegot in the full-time offer in my
dream job.
Why am I going to go do amaster's?
Because I had a place atCranfield to go and do finance
and management.
And I was like I'm not going todo this master's, I already
(08:47):
have the dream job.
I'd rather explore otherinterests in this year out.
And my dad was like what areyou talking about?
Go and do your master's.
I was like, seriously, I'm notdoing this master's.
I value work experience overtheory.
So in that year out, what I didwas I worked in a private
equity firm called TLG Capital,and that's really where I
(09:10):
started to really understandwhat impact investing on the
continent really meant.
Because we did a deal in Ugandaa local manufacturer of
antiretroviral and antimalariadrugs and it was a very
successful investment for us,and I wasn't an entrepreneur
back then.
So I put a little bit of moneyof my personal money in as well
(09:30):
and made a very attractivereturn.
But at the same time, we sawpeople's lives being improved by
genuine access to genuinemedicines for malaria, for HIV.
So it was the first time that Isaw that in the Africanan
continent you can invest andmake money whilst also improving
people's lives at the same timeright so when I saw that, I was
(09:52):
like, oh wow, this isinteresting.
I'd like to do this back home innigeria, but at the time I
didn't know how.
I just thought, you know, thisis something that will happen
later in the future.
So so in that year out I didthat.
I also spent some time in Spainlearning Spanish, because I'd
done Spanish at school and it'sa language that I always loved.
(10:12):
So I spent some time in Spainlearning Spanish and then, after
that year was done, I startedfull time at JP Morgan in M&A in
the in the London.
So yeah, I'm very grateful thatmy father eventually allowed me
to take that year out, becauseit was really the birth of what
would become later my love forthe continent and investing in
(10:34):
the continent.
Speaker 1 (10:35):
That's beautiful.
So how many years were you atJP Morgan?
Speaker 2 (10:38):
So I was there for about four years just under four
years.
I started in the M&A team andthen I moved to the leverage
finance team and I had theprivilege of being in different
sector teams as well.
So I was in the industrialsteam, I was in the consumer
health care and retail team andthen the leverage finance team,
where I was also able to work ontransactions in emerging
(10:59):
markets, including Nigeria.
So I I got a very, reallywell-rounded experience at JP
Morgan, which I'm very gratefulfor.
Speaker 1 (11:07):
And then came this opportunity with Syntaxis
Capital to move to the continent.
Yes, yeah, so tell us a bitabout that.
This was not investment banking.
Speaker 2 (11:17):
No, this was not investment banking.
So they are.
They were a private equity fund, private equity and credit fund
.
They're based in Eastern Europe, based in Central and Eastern
Europe, and they had seen a lotof the trends that we were
seeing in Africa 15 yearsearlier in Central and Eastern
Europe.
So they're already successfullymerging market investors.
So they had hunted me to helpthem set up their Africa
(11:40):
business.
So I did that.
For about five years, we were onthe road for a fund and it was
during that five years that Ireally started to see the gaps
in the market in terms offunding for women, in terms of
funding for SMEs.
During that time, there wasless than 10 funds in the whole
of Africa that were femalefounded and female managed.
(12:03):
There was less than 2% ofcapital going to female
entrepreneurs and at the time,there was about an 80 billion
funding gap for SMEs in Nigeriaand in Ghana.
So when I saw those disparities, that's really what started to
birth the hunger for doingsomething of my own where we
would specifically focus onplugging the gaps for women,
(12:26):
because I was struggling tofundraise as the face of this
African fund, but I saw numerousfunds around me that were male
led getting capital and raisingcapital and scaling their funds.
So I thought, if we don't Ialways say that we don't need
seats at the table, we need tocreate our own tables.
I said with Arua we'll createour own table.
(12:47):
We will mobilize capital fromnon-traditional sources, so not
the DFIs and the traditionalinstitutional investors that
typically invest in funds.
We will mobilize local HNI,local family office capital to
do our first deals and then, aswe have a robust portfolio
that's validating the strategy,the institutional investors will
(13:08):
come.
And that's exactly whathappened In 2019,.
I spun out of Syntaxis Africa.
I was 29 years old.
I was five months pregnant.
Speaker 1 (13:19):
No way.
Speaker 2 (13:20):
A lot of people thought I was crazy.
They were like you haven'traised the fund, just go back to
jp morgan.
But I felt a strong sense ofpurpose.
I felt a strong sense ofconviction in what, in the gaps
that I had seen.
So I took that kind of boldleap of faith on the road less
travel to set up.
I remember a capital in 2019,july 2019.
(13:41):
We were able to mobilize somecapital from friends and family
to do our first investment inOctober 2019.
And this was in a companycalled Wemi Industries, their
local manufacturer of a range ofhygiene goods, including
sanitary pads for women.
And then we thought, okay,we've arrived.
I've arrived.
Now that we've done our firstdeal, the money will pour in.
And then hit.
(14:02):
And then covid hit all thoseconversations we were having
retreated and we had to startfrom scratch.
So that's when we started tomobilize local capital, put
people in spvs, reduce myminimum investment size, and the
rest is history.
I'm very grateful to a lot ofwomen that invested in Arua
(14:24):
during that time, that investedin parted ways with their
capital over Zoom.
So it was those investors thatenabled us to do our first five
investments and the thesis waswe're going to showcase that by
having more women allocatingcapital.
There's natural trickle-downeffects to women in your
portfolio.
There's natural trickle-downeffects to women in your
portfolio.
There's natural trickle-downeffects to gender diversity in
(14:45):
your portfolio, and this willenhance our returns.
But not only that.
It will also ensure that thereis significant social impact
because of the role that womenplay in our society, in Africa
as well.
Speaker 1 (14:59):
But what were those initial conversations like?
How did you see yourselftweaking your pitch at each?
Speaker 2 (15:06):
point.
I had to tweak my pitch atseveral points because in COVID,
people were very what's theword I'm looking for protective
of their capital.
The world was falling down.
People didn't know what wasgoing to happen.
Our pitch was this is a way todiversify your investment
portfolio.
This is a way to diversify yourinvestment portfolio.
This is a way to generatesocial impact.
(15:29):
Women are not getting enoughcapital.
We need to come together toinvest in our women.
But a lot of people had got intheir hands burned with private
equity in the past.
Right, because unfortunately,private equity in Africa
historically has not reallylived up to the return promises
of the African rising narrative15 years ago that everyone
jumped on.
So we had to tweak our fundstructure.
(15:49):
We had to tweak our fundeconomics.
We had to really proveourselves that we could identify
these businesses, we couldinvest in them, we could return
capital to give people comfort.
We had to reduce our minimumticket size.
So I always say that if you're afirst time fund manager and you
(16:09):
have a fund ticket size of$500,000, good luck.
So we had to make a lot oftweaks, but there were so many
no's, so many no's, so many no'syou don't even want to know the
hustle and grind and grit thatit took during COVID Multiple
Zoom pitches pitching to angelinvesting clubs, pitching to
women investing clubs, pitchingto groups of friends to come
(16:32):
together into SPVs.
So yeah, it was a lot of.
It was a lot of work and, yes,a lot of no's and a lot of
rejection, but thank God we gotthere in the end rejection, but
thank God we got there in theend.
Speaker 1 (16:47):
That's incredible.
So you've managed to grow AruaCapital to I think your assets
under management last time Iread was $60 million, correct.
What do you think are some ofthe key strategies that you use
to increase and maintaininvestor confidence?
Speaker 2 (17:01):
Yes.
So I think for us, we are justvery intentional about being
consistent with our strategy.
From our inception, we set outto create a gender lens platform
where we can showcase that ifyou invest in women as capital
allocators, there's that naturaltrickle-down effect to women in
(17:22):
our portfolio and with fund one, we did what we were going to.
We did what we said we weregoing to do.
Fund one we were able tomobilize capital from local
investors and h and i's andfamily offices globally to begin
with.
We then got the attention ofvisa foundation, which anchored
our first fund with a fourmillion dollar investment.
(17:43):
We then got MasterCardFoundation.
We then got FSD Africa.
So I think with Fund One, itwas really about gaining the
trust of investors to invest inyou as a person.
And now with Fund Two, wherewe've actually doubled and
hopefully will triple our sizeof Fund One, the reason that
(18:03):
we've been successful in scalingis because we were consistent
in our strategy.
We said we were going to dosomething and that's what we did
17% of our portfolio of FundOne.
We said that we were going toinvest for commercial returns
and social impact.
Our Fund One returns are aboveglobal benchmarks when you
compare it to other 2019vintages across the world.
(18:26):
So I think that also has givenour investors a lot of
confidence.
We said we're going to investand create jobs.
Our fund one is supporting175,000 directed indirect jobs
indirect jobs.
So these are just somehighlights that I've pulled out.
That has given people that arenow looking at Fund 2, that are
(18:47):
moving away from me as a personalone but now looking at the
results to see.
Okay, what has Fund 1 done?
Have you validated theinvestment strategy?
Have you been consistent withyour investment strategy?
So I think those are some ofthe things that have helped us
scale from 20 to now 60 andhopefully to even more when we
(19:08):
reach a final close of oursecond fund.
Speaker 1 (19:17):
That's fantastic in female-led businesses and also
female-focused, because I knowthat your first investment,
Waymi, it's not female-led, butthey make hygiene products which
serve women, which I think is agreat way of framing the gender
lens financing.
So what are some key criteriasyou look at in the businesses
you invest in?
Speaker 2 (19:39):
Yeah.
So for us, we want to invest inde-risked business models.
So the majority of our fundwill be investing in businesses
that have proven their businessmodel.
They've been operating for atleast two years and they have a
minimum of at least $500,000 ofrevenue things that we look at.
(20:05):
We also want businesses withstrong profit margins and EBITDA
margins.
We want businesses that haveshowcased kind of strong
historical growth as well.
And then, for our gender lenscriteria, we want businesses
that are either female founded,female led, or could be male
founded or male led, but aportion, a significant portion,
of their value chain isbenefiting women, and that could
(20:26):
be, for example, we have abusiness in our portfolio called
Omni Retail, where they areservicing over 140,000 retailers
where 75% of them are women.
That's the type of, that's thetype of value chain impact that
we want to see, if it's nottypically a female-founded or a
female-led business.
(20:46):
Or it could be like WEMI thatyou mentioned, where they're
providing goods and servicesthat improve women's lives.
So that's really the criteria.
And then when you add oursector focus as well, where we
want to invest in necessities,so we don't want to invest in
nice-to-haves, we want to investin necessities, so we don't
want to invest in nice-to-haves.
We want to invest in health.
(21:07):
We're investing in essentialconsumer goods like food.
We're investing in financialinclusion and fintech.
We're investing in access topower through renewable energy.
So these are really the keythings that we're looking for as
we screen investmentopportunities.
Speaker 1 (21:24):
How many companies do you have in your portfolio
today?
Speaker 2 (21:26):
So, across both Fund 1 and Fund 2, we have 13
companies.
Speaker 1 (21:33):
And I'm sure there are many success stories, but is
there one that is like astandout?
Not that I'm making you pick,but is there one that's like a
standout Just showing the impact?
Or, from the impact point ofview, what's your investment,
how you've seen your investmentgrow, this particular business,
and where they are todaycompared to when you first
invested in them?
(21:53):
Just one example would justgive color to the conversation
we're having.
Speaker 2 (21:58):
Yeah, so there are many examples, because we did
some analysis on our portfoliothe other day and we saw that
across our fund one, thebusinesses that we've invested
in have grown by 22 timescompared to when we first
invested.
So the capital we provide isvery transformative to these
businesses.
But if I had to pick I don'tlike to pick because it's like
(22:19):
picking your children, I know.
But if I had to pick, I'llprobably give the example of a
cool box.
So, cool box, they providesolar-enabled refrigeration for
market women, predominantly inoff-grid areas.
So if you don't have access topower, you don't have access to
(22:40):
electricity and you're sellingcold drinks or frozen fish or
frozen meat, you typically haveto throw your meat or fish away.
So with our product, they canhave electricity and power for
up to four days as long as theyhave access to the sun.
So when we invested in thisbusiness, we were the first
institutional equity investor inthe business in 2021.
(23:03):
Since then, they've grownrevenues by more than five times
.
They've been able to provideelectricity to over 3,000 micro
SMEs and off-grid areas, whereover 70% of those are
women-owned, and we've been ableto help them attract five times
more funding than when weinvested at significant uplift
(23:26):
in terms of valuation to what weinvested at, and now that
company from just servicingNigeria is now selling its
product in 25 countries aroundthe world Fantastic.
So it just gives you an idea ofthe type of journey that the
companies that we invest in goon through our capital capital
(23:48):
where we're able to spot themearly, provide them with the
capital that they need and thenwe're able to get them to a
stage where larger investors,larger strategic investors are
able to scale them even further.
So I'd say cool box isdefinitely one of the success
stories of our fund.
It it's a female foundedbusiness.
The management team is over 50%women and over 70% of their
(24:12):
customers are women as well, soit's really gender lens
investing at its best.
Speaker 1 (24:16):
That is just incredible, because you know
that I was my follow on questionwas going to be about expansion
outside of their initialmarkets, but you've already
covered that with this example.
There's someone else I saw onyour portfolio list, taylor.
Yes, I interviewed her manyyears ago Well, I say many,
about three years ago or so andit's so incredible.
(24:38):
I caught up with her inSeptember of last year and it's
incredible to see how much she'sgrown and been able to attract
funding.
And I just wonder so, beyondfinancial capital, what other
forms of support does Arua offerto your portfolio companies?
Speaker 2 (24:57):
Yeah, and so actually it's great that you mentioned
Taylor, because what we see witha lot of our investees,
including Taylor, is that we canoften help them strengthen
their finance function becauseentrepreneurs, they've been very
focused on growing the top line.
They've been very focused onscaling, entering new markets,
(25:18):
entering new, getting customers.
But sometimes they forget someof the details in finance.
So helping them implement anERP, helping them implement an
accounting system to help themtrack what is my profitability
per SKU?
What is my, how are my costsper unit moving on a weekly
basis, getting into those veryclear operational and financial
(25:40):
KPIs can help you, when you haveinvestment, make better
informed decisions which, whereshould you be putting your
working capital?
Which SKU should you beexpanding?
So helping them with theirfinance function is something
that we do.
We typically help implement anERP, we typically help bring in
a CFO.
Another thing that we do is wehelp with capital raising, so
(26:04):
helping them secure that nextround of capital.
So over 50% of our businesseshave gone on to raise larger
pools of capital about 18 to 24months after we invest.
So we're able to leverage ourrelationships to ensure that
they get subsequent rounds ofcapital to help them scale.
(26:24):
And then another thing we helpwith is governance.
We make sure that we'reinstitutionalizing these
businesses.
We always sit on the boards ofthese businesses putting in the
right corporate governance inplace so that when larger
investors come in, a lot ofthese structures are already in
place and they don't have tostart from scratch.
So those are just some of thequick wins that we try and do,
(26:47):
and because we're here in Lagos,we're close to our founders.
Having that proximity to ourfounders means that we can
really add value in a meaningfulway.
Speaker 1 (26:56):
We see a lot of growth and activity in Nigeria
and West Africa specifically.
Have you had any experiencebroadly more Pan-African and how
do you see the market forfemale-led businesses beyond
West Africa?
Speaker 2 (27:11):
Yeah, so obviously Nigeria is the biggest market.
It's one of the biggestrecipients of venture capital
and private equity activity, butalso Kenya and South Africa and
Egypt are also seeing a lot ofventure capital and private
equity activity.
But if you look at the recentresearch that just came out, the
(27:32):
picture is stark everywhere forfemale founders, unfortunately.
So, the same way that in Kenya,the same way that in Egypt, the
same way that in South Africa,female founders are just not
getting enough capital.
So the research was actuallydone on a Pan-African basis and
it showed that less than 2% ofcapital is going to female
(27:53):
startups across the continent.
So, unfortunately, I don'tthink that there is any part of
the continent that is immunefrom this ecosystem challenge of
underfunding to female-ledbusinesses, and that's why I
always say that a vision forArua is yes, we want to
(28:13):
obviously conquer the NigerianGhana market to begin with, but
over the long term, this is aPan-African vision, because
other parts of the continent arealso suffering from this
problem of underfunding to women.
Parts of the continent are alsosuffering from this problem of
underfunding to women.
So over time, we hope to expandto other parts of the continent
(28:35):
where we will have officesoutside of Nigeria and we will
also have other asset classes aswell that will be addressing
this issue.
Speaker 1 (28:42):
In addressing this issue.
I've listened to a lot of theconversations you've had over
the years and you'veconsistently spoken about having
women as capital allocators inthis process to help increase
the flow of capital to women-ledbusinesses.
And I just wonder, diswa, interms of other things that can
be done beyond women being atthe table or building their own
(29:05):
tables, are there any otherstructural barriers that can be
addressed or should be addressedto deal with this challenge?
Speaker 2 (29:13):
Yeah, so I think you've said it women being
capital allocators is one, butthen I think it's also just
amplifying the success storiesso that men can adopt gender
lens investing strategies aswell.
It's not only for women to do.
How can we amplify the successstories of the female-led
businesses that have done reallywell, that have scaled, that
(29:36):
have gone on to generate veryattractive returns for their
investors?
Yes, one, we need women capitalallocators, but we also need to
be very intentional aboutamplifying the success stories
of gender lens investing.
I think that's something thatwe try to do at Arua, but we
need more people to do that toshowcase how has having a gender
(29:58):
diverse board improved yourprofitability?
How is having a majority femaleled management team?
How is that driven revenuegrowth?
How has that driven revenuegrowth?
(30:34):
And let's equity and venturecapital industry by western
governments?
So I think that until that shifthappens, where more african
pools of capital are fundingAfrican fund managers, there
will not be enough capitalflowing to women, both as
capital allocators and both asentrepreneurs, because I feel
(30:57):
very strongly that what hasworked in the West for a private
equity and venture capitalmodel is not necessarily
importable to our context.
So the 10 plus 2 model is notworking.
So if you've looked at privateequity in Africa, returns over
the last decade, it will tellyou that story.
(31:19):
But because we do not haveAfrican pools of capital driving
this discussion, there is noskin in the game to go over and
above just ticking the boxes.
So until we start to utilizethe $25 billion of pension
assets $25 billion, by the way-of assets that we have in
(31:41):
Nigeria alone and start addingour capital to this conversation
.
I think that is a very systemicand structural barrier that is
not moving our industry forward.
So that's why, for us, we arereally trying to showcase
through our track record that wewant our track record to speak
(32:02):
for itself so that more localinstitutional investors, like
the pension funds, like theinsurance companies, the
sovereign wealth funds, can beconfident in starting to put
some of their capital intoAfrican fund managers like us,
because I think until we do that, we will not have enough aruas,
(32:23):
we will not have enough poolsof capital that are
intentionally trying to solveAfrican issues.
So that's a bit of acontroversial one, but I always
try and slip that in as well.
Speaker 1 (32:34):
It's very welcome.
This is actually probably thethird or fourth time I've had a
conversation around thisparticular issue the idea that
only African capital can buildAfrica, and what does that
actually look like?
And so, yes, I'm glad that youthrew that in there, and it
should.
Just, we need controversialconversations right now for us
to move the dial.
Speaker 2 (32:55):
We've seen the world closing in right USAID tariffs,
america first.
So we should start thinkingalong those lines and start to
try and be self-sufficientacross all of our industries.
Speaker 1 (33:08):
I agree, and even recently, I wanted to get your
take on the recent MasterCardwithdrawal of their commitment
to 54 Collective.
And just in light of that, andwhat we're talking about, what
do opportunities going forwardlook like with partnering with
global investors?
Speaker 2 (33:26):
Yeah.
So I can't speak to that becauseI don't know all the details of
the MasterCard duration, but Ithink it just points to we need
a more diverse pool of capitaland I think that goes to the
fact that if we have moreAfrican-American institutional
investors we're very glad tohave Bank of Industry become one
(33:46):
of our LPs in Fund2.
If we have more investors thathave boots on the ground here,
understand the local nuances,understand the local context, we
will be able to drive some ofthose discussions to suit what
is the reality on the ground,because I think that a lot of
(34:07):
Western organizations come withpreconceived ideas of things
that may have worked in the Westbut may not necessarily be
importable to our reality.
So by having more Africaninstitutional investors that
live here, that understand thenuances that are here with us on
the ground, then we'll start tobuild tailored solutions to fix
(34:31):
the very nuanced problems thatwe face every day as a continent
.
So I think that's really it iswe need to design differently.
And to design differently youneed desert skin in the game.
Fortunately, a lot of theWestern global organizations may
not necessarily have the skinin the game because they're not
living through the issues likeus on a daily basis.
(34:52):
So that's really what I have tosay for that.
Speaker 1 (34:55):
Thank you for that.
So I know that you're currentlyworking towards the final close
of FON2.
And I was just wondering whatexcites you about the next phase
for Arua Capital.
Speaker 2 (35:05):
Yeah.
So what excites me is we'reobviously growing as a firm,
we're growing the team, we areonboarding more companies into
our ecosystem and really justbeing able to see the journey of
some of our early investmentsas well and starting to exit
some of those and starting toreally not only validate our
(35:26):
investment strategy on paper butalso have some realized exits.
I'm very excited for that phaseas well, because I think the
proof is in the pudding, as theysay.
So we're entering into a phasenow where we're going to be
exiting some of our portfoliofrom fund one.
We're entering into a phase nowwhere, with the new capital we
have in fund two, we're going tobe birthing a new generation of
(35:48):
Arua portfolio companies.
It's a very exciting timebecause we're ending one story
and starting another one andexpanding the team as we do it
and also welcoming new types ofinvestors into our ecosystem as
well that have just joined us inthe journey for fun too.
So, yeah, it's a very excitingtime for us at arua.
(36:10):
It's a busy time but it's onethat that has really shown just
how far we've come from fromcovid, when it was a very
difficult time, but to now see afully developed ecosystem
around us, different pool ofinvestors, different types of
companies, it's really.
I'm really grateful to be partof the journey and to witness
(36:31):
just the evolution of Arua.
So, yeah, grateful to God forwhere he's brought us.
Speaker 1 (36:36):
That's amazing.
This has been quite aninsightful conversation and,
like I said in the beginning,I'm happy that I waited.
It's exciting to see the workthat you're doing and the impact
that you're having and alsojust demonstrating that these
companies are commerciallyviable and excited to see what
the next phase looks like.
In wrapping up, I normally askmy guests to do two things to
(36:59):
reflect and to give advice.
Reflection is just anopportunity for you to tap
yourself on the back and say I'mproud of me.
So, just looking back at yourcareer and what you've been
building over the last six years, what would you say has been
your proudest moment at this one?
Speaker 2 (37:16):
oh, gosh, what has been my proudest moment?
I would say the final clays offun.
One was a very proud momentbecause it had taken me about
nine years to get to that point.
Right, haven't tried to raisemy first fund with Syntaxis for
five years and then three and ahalf years trying to get to a
(37:38):
final close of Arua.
Being able to get to a finalclose of Arua having spun out
people thought I was crazy.
They're like, oh, you're nevergoing to raise a fund, just go
back to JP Morgan and collectyour salary.
So that was a very proud moment,because it was just years of
rejection, years of delay, yearsof setbacks.
(37:59):
So that was a very proud momentfor sure.
Another proud moment, though,was when we got to a first close
of Funtune.
We launched Funtune in November2023, just after I had my
second son, and within sevenmonths, we got to a first close
of that was bigger than the sizeof Fon1.
(38:20):
So that was another proudmoment where it just showed that
delay is not denial.
Everything is meant to happenas it should.
So, yeah, I'm just reallygrateful for the journey.
I'm very proud of how far we'vecome as a team and and yeah, we
have so much more to do, so myreflection is one of just
(38:41):
immense gratitude and immensepride in in everything that
we've achieved thank you so muchfor that, and if you could give
one piece of advice to otherwomen who are building
businesses in Africa, what wouldthat be?
My advice would just be keep atit.
Keep at it.
Majority of success ispersistence.
(39:02):
Majority of success is beingthe last person standing.
So there will be no's, therewill be setbacks, there will be
delays, but let your purpose,let your why fuel that
determination, fuel thatpersistence, and it will happen.
So I hope that my story canmotivate, my story can inspire.
(39:25):
It took close to nine years forme to get to a final close of
Fund one and for me tosuccessfully raise an
institutional fund.
So I think just that that thatpersistence is very necessary to
succeed.
So my advice is know your why.
Always go back to it and tryand do something that's more
(39:46):
than you, because that's whatwill keep you going.
If you're just building formoney or building for status or
building for recognition, youwill quit in those difficult
times.
I think why I was able to go aslong as I did was because I
knew that if I was successful,that would really transform the
landscape, and I'm very gladthat more and more women now are
(40:09):
starting to raise their ownfunds because they've seen that
it's possible through what we'vedone.
So that would be my advice isjust to be persistent and make
sure that your story is morethan just you, so that it will
give you the feel to keep ongoing.
Speaker 1 (40:25):
That's fantastic.
Thank you so much for that.
So where can people learn moreabout Arua Capital?
Speaker 2 (40:32):
Please go to our website, wwwaruacapitalcom, and
you can also follow me onLinkedIn.
Follow our company page onLinkedIn.
We're very active on socialmedia so, yes, you should be
able to follow us on all thesocial media platforms.
Speaker 1 (40:48):
Thank you so much, Adeswa.
This has been a greatconversation.
Speaker 2 (40:52):
Thank you.
Thank you so much for having me.
I'm really glad that we hadthis conversation and it's
amazing what you're doing,highlighting different business
stories on the continent, sothank you for having me.
Thank you.
Speaker 1 (41:03):
Thank you so much for listening.
If you're not alreadysubscribed, please do so on
Apple, spotify or wherever youget your podcasts, and don't
forget to leave us a review sowe know how we're doing.
I'm Akego Okoye and you havebeen listening to African
Business Stories.
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