“We are more of a hybrid—looking at SMEs with growth potential, not necessarily VC-scale, but with unmet demand that can leverage funding and technical assistance to grow,” Ahmad explained, setting Sabou apart from firms focusing solely on high-growth startups.

The fund plans to invest between $350,000 and $500,000 in 25 SMEs across sectors such as agriculture, renewable energy, logistics, and mobility. The goal is to bridge the funding gap faced by late-stage pre-seed to Series A SMEs that are primed for growth but lack structured financial support.

The name “Sabou,” inspired by the Hausa word “Sabo,” meaning rebirth or renaissance, reflects the fund’s aim to revitalise African businesses with strong growth potential. Sabou Capital takes a unique approach, investing in companies that utilise technology to optimise operations rather than those that are purely tech-driven, distinguishing it from traditional venture capital firms.

Sabou aims for a 2-3x return on investment, a more modest goal than the high-risk 10x returns typically sought by traditional venture capital. This strategy places Sabou Capital as a micro-private equity firm, competing with established organisations like Aruwa Capital and Catalyst Fund.

Ahmad’s decision to launch Sabou came after differences in vision at Aduna Capital. Speaking on this, he said, “Our team was well aligned on the ‘what’ and the ‘why,’ which many co-founders consider the most crucial, while little focus was given to the ‘how.’” He further noted, “This was a learning point for me as I discovered that even the scale of impact one wants to make differs from person to person.”

A key feature of Sabou’s strategy is its gender-lens investment approach, prioritising women entrepreneurs. Ahmad highlighted the financial advantages of investing in women-led businesses: “For every dollar invested in a woman, the return is 2x,” he said. 

Recognising the limitations women face in securing funding, he shared his own experience, stating, “It wasn’t possible for me at the time to travel to Lagos for fundraising. I ended up raising from a family office in Northern Nigeria, which ultimately led to selling my company before we were ready.”

In addition to funding, Sabou Capital offers technical assistance to ensure its portfolio companies are investment-ready, focusing on corporate governance, financial management, and operational systems. “We provide support to make sure these businesses are investment-ready,” Ahmad emphasised.

Sabou is expanding beyond Nigeria, with plans to invest in Senegal and Côte d’Ivoire, economies with projected growth rates above 6% and currencies pegged to the Euro. Ahmad explained the decision to diversify: “As Nigeria grapples with high inflation, currency devaluation, and slower growth, we decided to leverage the expertise of the founding team to diversify our risk.”

The firm’s recent addition, Christian Amouo, a private equity expert with a strong background in Francophone markets, will play a huge role in driving Sabou’s expansion. Amouo previously launched his fund in Cameroon, investing in four companies, three of which are still operational.

Sabou Capital has yet to begin formal fundraising but has already identified 20 startups in its pipeline. The fund plans to shortlist two to three companies for its first round of investments, with plans to scale across West and Central Africa. 

“The goal is to scale this model across West and Central Africa,” Ahmad said, outlining the fund’s long-term vision to help SMEs grow into large enterprises, ultimately attracting investments from larger private equity firms or strategic buyers.

General Partner at Aduna Capital, Surayyah Ahmad, co-managing the fund with Sanusi Ismaila, expressed enthusiasm about this initiative, emphasizing a zeal to identify and nurture exceptional opportunities in the region.

Aduna Capital’s investment strategy allocates 55.5% of its capital to startups in Northern Nigeria, leveraging the projected growth that positions Nigeria as the world’s 4th largest country by 2050. 

While maintaining a strong focus on the North, the fund will also channel investments to outstanding founders across the country and the broader African continent. Notably, the vision encompasses a dedication to achieving 50% female representation among the startups receiving backing.

Surayyah Ahmad, an experienced founder with a successful track record, brings a wealth of knowledge to this venture. Having founded the eCommerce startup YDS Online, which was later acquired in 2022, Ahmad has a deep understanding of the challenges and opportunities within the startup sector.

Her co-founder, Sanusi Ismaila, is a major figure in technology innovation in Northern Nigeria, having established Colab, the region’s largest innovation hub. Colab has been essential in nurturing startups and fostering tech talent, contributing to the emergence of successful ventures like Sudo and Payant.

Aduna Capital aims to redefine the investment space by shifting attention from Lagos, which currently hosts over 80% of Nigerian startups. Recognising the imbalance in investment distribution and the challenges faced by female founders, Aduna Capital aspires to bridge these gaps and be a catalyst for transformation in Northern Nigeria.

The fund will concentrate on pre-seed and seed-stage startups, with plans to invest in over 50 ventures in these early stages. Ahmad disclosed that investments ranging from $50,000 to $200,000 will be the norm, and the firm is open to occasionally writing angel checks to address the angel investing gap in the region.

Acknowledging the scarcity of exits in the market, Aduna Capital intends to exit investments at the Series A stage. However, Ahmad clarified that around 20% of portfolio companies would be retained, with provision for follow-on investments.

While details about the percentage of secured funds remain undisclosed, Ahmad confirmed that a substantial portion is ready for deployment, signaling the fund’s readiness to commence investments. In a unique approach, Aduna Capital will explore alternative models, accommodating regional investors uncomfortable with the traditional VC model, such as profit-sharing arrangements.

Aduna Capital’s ultimate goal is to foster innovation, inclusivity, and economic growth in Nigeria and beyond, creating a lasting impact on the African continent.