Impact investor Goodwell Ventures and Oxfam Novib, a Dutch foundation and Oxfam International affiliate, created Pepea, a €20 million ($21.7m) fund to finance early-stage entrepreneurs in Kenya, Uganda, and Ethiopia. Oxfam Novib Impact Investments’ venture debt fund will focus on mezzanine capital, which may be converted into equity.
Pepea will target early-stage enterprises with one to five years of income but no cash. Goodwell Investments, which will oversee the fund and create its portfolio, told TechCrunch that it will assist entrepreneurs in planning and raising their first rounds by ensuring they have the proper “structures and procedures.”
The fund will invest in sustainable agricultural, energy, clean transportation, logistics, and waste management companies, which create fundamental commodities and services that lower-income households spend a lot on. Pepea wants to make these essentials cheaper and better.
Because tech and brick-and-mortar operate best in these circumstances, the fund seeks high-impact tech-enabled firms. “Tech provides access and affordability, and both are basic for the end-users we intend to target, the lower income groups on the continent,” said Goodwell Investments managing partner Els Boerhof.
Oxfam, Goodwell, and the fund will invest in entrepreneurs in Kenya, Uganda, and Ethiopia. Oxfam incubates SMEs in the three markets, while Goodwell finances Uganda and Kenya.
Goodwell’s funds will invest up to $1 million in Pepea, the impact investor and non-inaugural profit fund.
Goodwell has invested in approximately 20 companies, including Paga, MFS Africa, Sendy, Max—Ng, and Good nature agro. Last year, it led Copia Global’s $50 million Series C financing. Last year, the impact investor created UMunthu II, a $154 million fund with approximately €310 million under management.
Oxfam Novib founded its first investment fund in 1996 and has supplied Entrepreneurs with cash through its Impact SME Development (iSME) program since 2015. The Pepea fund will assist businesses in optimizing their community impact.
“Oxfam Novib was crucial in building the microfinance industry to offer financial services where they were required. “As that industry has evolved beyond NGOs, we are ready to alter course towards a less-served portion of the market,” said Oxfam Novib investment manager Tamara Campero.
“We realize the limitations of SMEs in the region (particularly women-owned) to obtain fine-tuned patient capital and we now want to play a role to satisfy those needs,” added Campero.
