Focused on creating a more inclusive economy, Goodwell investments and Oxfam Novib, a Dutch foundation and Oxfam International affiliate, have launched a €20 million ($21.7 million) fund, Pepea.
Backed by Oxfam Novib Impact Investments, Pepea aims to provide financing to early-stage startups in Kenya, Uganda, as well as Ethiopia, and will provide venture debt with a focus on mezzanine finance, a debt that can be turned into equity.
These early-stage businesses will be between the ages of one to five years. They must be generating revenues, but haven’t raised capital.
The operations of the fund, including the portfolio development, will be managed by Goodwell Investments, providing them with the right structure and systems to become funding ready and raise their first rounds. The initial funding amount would be between $100,000 and $500,000, with follow-on investments of up to $1 million from Goodwell’s funds. Additionally, Oxfam runs an SME incubation program in these three markets.
While the fund targets high-impact tech-enabled businesses, sectors in which priority will be placed include sustainable agriculture, energy, clean mobility, logistics, and waste management sectors, which produce basic goods and services that represent a huge proportion of household spending for lower-income communities. Pepea’s long-term plan is to improve the quality and affordability of these necessities.
Goodwell, established in 2007, has provided equity funding to over 20 businesses, such as Paga, MFS Africa, Sendy, Max.ng and Good nature agro, mainly targeting startups in finance, agriculture and mobility. Last year, it led a $50 million Series C round for e-commerce scaleup Copia Global. Subsequently, the impact investor launched its second fund, the UMunthu II worth $154 million, with a total of €310 million now under its management.
Oxfam Novib launched its first investment fund in 1996 and has since 2015 worked to provide SMEs with access to finance through its Impact SME Development (iSME) program. With the aim of furthering this goal, the organisation has established the Pepea fund, with the intent to help businesses achieve their maximum positive impact within their respective communities.
