FMO and Collaborative for Frontier Finance partner to launch an Emerging Capital Allocators project across Africa

FMO and Collaborative for Frontier Finance partner to launch an Emerging Capital Allocators project across Africa

Published: 07-12-2021 08:30:04 | By: Bob Koigi | hits: 3960 | Tags:

FMO has partnered with Collaborative for Frontier Finance (CFF) to help recruit, train, and support more women and other underrepresented capital allocators in early-stage venture capital (VC) ecosystems across Africa.

The project will provide an opportunity for more aspiring fund managers, particularly in Ghana, Morocco and Tanzania, to gain the necessary experience to start raising capital, managing assets, and closing deals. Ultimately, this will help bring to market more fund managers with a proven track record in early-stage VC while helping provide more growth capital to businesses in need.

This project focuses on addressing the need for more hands-on portfolio managers in the VC industry across Africa and many frontier markets. Many of them apply very different strategies to select and grow companies than those operating in traditional private equity fund models. More local fund managers understanding the needs of scaling businesses delivering community impact are needed to activate these nascent VC ecosystems.

CFF is a collaborative of leading impact-oriented stakeholders, committed to addressing the gap in access to capital for Africa’s small and growing businesses. A key component of CFF’s mission is to support an expanding network of over 70 local capital providers operating across the continent. CFF purposely works with in-country and international stakeholders to collectively address the needs of these emerging capital allocators, strengthening their capacity and increasing their funds under management.

CFF’s Early Stage Capital Provider Network approach is to share learnings, best practices and work collectively to find innovative solutions to the challenges faced by emerging capital providers. Through its partnership with the International Finance Corporation (IFC), CFF has developed and manages an online resource portal for fund managers. More recently, CFF has been helping develop catalytic investment funds for early-stage capital providers, with a particular focus on supporting gender lens investing.

FMO will collaborate with CFF on a 15-month program to support a cohort of local capital allocators, mainly from Ghana, Morocco, and Tanzania. The project objectives are to:

● develop the capacity of the cohort through tools, trainings, and expert-led initiatives;

● establish opportunities for the cohort to access institutional funding to begin and/or continue managing funds; and,

● support the country level ecosystem for capital provision for early-stage businesses.

This project is funded through the Entrepreneurial Ecosystem Building component of the FMO Ventures Program Technical Assistance Facility, co-funded by the Dutch Government and European Union. This component seeks to foster the maturity of the venture capital sector in targeted emerging markets by improving services of incubators, accelerators and other entrepreneurial support organizations, as well as enabling more early-stage financing for ventures.

Marieke Roestenberg,  Ventures Program Manager, FMO: “Our partnership with the Collaborative for Frontier Finance is part of our journey to promote and support flourishing local VC ecosystems, including first-time fund managers and other emerging capital allocators, particularly those beyond the main tech hubs in Africa. We look forward to supporting CFF and collaborating with the broader consortium for the growth of the early-stage VC industry across Africa.”

Drew von Glahn,Executive Director, CFF: “Access to capital has been an ongoing challenge for Africa’s small and growing businesses. COVID has only further exasperated such challenges. With our partnership, CFF and FMO look to accelerate the capacity and scale of the emerging class of local capital managers that are critical players in meeting the financing needs of Africa’s entrepreneurial and growth-oriented small businesses. A key component of our joint effort will be to advance the opportunity for women-led capital managers to scale their fund vehicles.”