A female-led venture capital fund focused on African women founders nears its €60 million target

Fatoumata Ba
Fatoumata Ba
Image: World Economic Forum / Greg Beadle
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The number of women founders and co-founders in Africa is on the rise, according to research by Venture Capital for Africa (VC4A), an online community for startups. In 2019 that number was still just at 18%, or fewer than one in five—but it’s still better than in supposedly more “advanced” startup hubs like Silicon Valley.

Fortunately, African hubs don’t have to replicate the flaws of more mature markets. Several female African leaders in the tech and finance space are taking matters into their own hands.

Fatoumata Ba, a 2019 Quartz Africa Innovator, has spent the last decade as an entrepreneur and executive building digital businesses and understands the challenges Africans face in raising startup funding on the continent. That’s why she, the former founding head of Jumia in Abidjan, just launched the Janngo Capital Startup Fund.

Janngo Capital has just raised €15 million ($16.5 million) from the European Investment Bank as a key step in her team’s target of closing a €60 million fund in the first quarter of 2020. It has previously raised undisclosed amounts from family offices among other sources. But it isn’t waiting till the fund closes and has already quietly invested in three early-stage ventures.

It aims to be the largest pan-African VC fund able to deploy capital from seed through growth stage, says Ba, who is originally from Senegal. She argues this is key because “the toughest thing about building a startup is actually starting up.” Pointing to the 70% failure rate in the first two years globally, she intends to take a hands-on approach to help founders pilot and de-risk their business models.

Crucially, Ba and her team are 60% female, with plans for 50% of its portfolio to be founded or co-founded by, or directly benefitting, women. “This is critical and was an essential part of my motivation to take a leap of faith and become an investor myself,” she says.

In Africa, there’s a $42 billion funding gender gap across the board, according to the African Development Bank and even when there is funding it’s often micro-financing with “small amounts and big interest rates” she points out. The funding gap is particularly striking as research from sources including the Global Entrepreneurship Monitor shows African women are easily the most entrepreneurial in the world, with a rate of about 26% of the female population aged between 18 to 64. While some of that might come out of necessity with a lack of formal jobs, a key feature is the lack of funding for these female-led businesses.

Ba is not alone, of course, in focusing on the paucity of funding for female founders. Last year, Alitheia Capital launched a gender fund led by veteran investor Tokunboh Ishmael, with a target of between $75 million to $100 million for women entrepreneurs.

“Female fund managers are also more likely to invest in and have access to female founders through networks male fund managers may not have access to,” explains Barbara Iyayi, a fintech growth equity investor. “These expanded networks give rise to more opportunities that increase the quality of deal flow and opportunities to make strong returns, particularly in Africa where the diamonds in the rough are not easily noticeable.”

Ultimately, fund managers will always have a fiduciary responsibility to achieve the best possible returns for their investors but focusing on female founders won’t be an impediment to achieving those targets in a more level playing field.

In fact, there’s an argument to say better gender-balanced tech ecosystems across Africa with more female engineers, executives, board members and fund managers will do more than just match previous levels of return. “Such an ecosystem would yield more scalable, impactful companies and in return, more exits and stronger commercial returns,” says Iyayi.

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