A Gender-Lens Investor, ShEquity Aims to Close the Gender Funding Gap in Africa
by Providing Smart Investment to African Female-owned and Led Businesses
With a $1.2 million co-investment grant from the USAID-funded West Africa Trade & Investment Hub (Trade Hub), ShEquity Partners (ShEquity), an investment firm that promotes women’s entrepreneurship in Africa, will invest in and support more than 100 high-potential women-owned or led businesses.
According to Pauline Koelbl, Founder and Managing Director of ShEquity, women entrepreneurs are integral for Africa’s success, as they operate more than 40 percent of small and medium-sized businesses on the continent. However, African women entrepreneurs face the hurdle of collectively growing these businesses due to $42 billion less in financing than their male counterparts.
“If Africa is to reach its full economic potential, smart investment for African women entrepreneurs needs to be dramatically increased,” Koelbl says. “The lack of financing, combined with insufficient business support, put potential women entrepreneurs and those seeking to expand their already successful businesses in a growth deficit or low-income trap, widening the gender gap and reinforcing negative biases.”
ShEquity’s USAID Trade Hub-backed project addresses these challenges by combining cash investment, structured technical support, and access to high-value networks. Specifically, ShEquity will leverage its $1.2 million co-investment grant to attract at least $15 million in private funding that will be cumulatively used to invest in, scale, and accelerate women-owned or led businesses operating in Benin, Burkina Faso, Côte d’Ivoire, Ghana, Mali, Niger, and Nigeria. The businesses targeted will operate in one of six key sectors: agribusiness, healthcare, tech-enabled solutions, renewable energy, mobility, and fast-moving consumer goods.
Also, as part of the USAID Trade Hub project, ShEquity will provide business development services and technical support to 120 women-owned or led businesses in the target markets and also select 12 high-growth, high-impact businesses that will each receive at least $50,000 in venture capital funding. The combined investments in the 12 selected companies are expected to create at least 200 jobs and benefit around 20,000 people economically either directly or indirectly, along their respective value chains, through 2024.
To accomplish its project goals, ShEquity will leverage its proven experience in championing women-led businesses for success. ShEquity is intentionally building an integrated and holistic approach towards unlocking the potential of African female founders. ShEquity’s strategy involves combining its ShEquity Business Accelerator (SHEBA) and its Investment Vehicle to support women to grow their businesses. SHEBA provides pre-investment venture building support to allow access to a trusted pipeline of potential deals and serves also as a post-investment technical assistance facility.
Started by Koelbl in May 2020 with her own seed capital of just $250,000, ShEquity has since invested in eight businesses in Sub-Saharan countries. Since the launch, ShEquity has been investing as a special vehicle purpose and is now in the process of formalizing into a venture capital fund structure. According to Koelbl, ShEquity’s current portfolio of companies have impacted more than 13.5 million people across Sub-Saharan.
Commenting on what this partnership means to ShEquity, Koelbl stated, “we are excited about the future, as we hope to see more action towards democratizing access to capital and closing the gender funding gap in Africa. Backing female-led funds is the best strategy to address gender funding gap because of its trickle-down effect: more diversity in capital allocators translates into diversity of businesses getting funded.”
The USAID Trade Hub’s partnership with ShEquity represents its commitment to ensuring more women in West Africa have the access to finance, resources, and knowledge needed to grow their businesses and speed economic development in the region.
“African startups face many hurdles, but those launched by women even more so, despite their drive and determination,” said Robin Wheeler, Chief of Party for the USAID Trade Hub. “The USAID Trade Hub is proud to join with ShEquity to respond to this challenge with a coordinated approach, providing capital as well as operational and technical support to unlock the full potential of the many women-owned businesses in Africa.”