Adesuwa Okunbo Rhodes
Interview with Adesuwa Okunbo Rhodes
FOUNDER and MANAGING PARTNER, ARUWA CAPITAL MANAGEMENT
Lives in: Nigeria
Adesuwa Okunbo Rhodes launched Lagos-based Aruwa Capital Administration to sort out a major funding hole for small companies in Nigeria and Ghana, significantly these led by ladies. About six years on, the non-public fairness agency has accomplished greater than a dozen investments.
How we made it in Africa editor-in-chief Jaco Maritz spoke to her about constructing and working an funding agency in West Africa.
Subjects mentioned throughout the interview embody:
- What it takes to launch and develop a personal fairness agency in West Africa
- One in all Aruwa Capital’s most profitable investments to this point
- Offers she handed on however now needs she had backed
- How non-public fairness corporations earn a living
- The hardest components of working an funding agency
Watch the total interview under: (solely obtainable on howwemadeitinafrica.com)
Interview abstract
Adesuwa Okunbo Rhodes based Aruwa Capital Administration in 2019 after recognizing a big funding hole for small and medium-sized companies in Nigeria and Ghana. The shortfall, estimated at round $150 billion, was significantly acute for feminine entrepreneurs. Fewer than 2% of funding {dollars} in Africa have been going to women-led companies, she says – a niche she got down to handle.
Establishing the agency meant ranging from scratch. Earlier than Aruwa might again its first firm, Okunbo Rhodes needed to persuade traders to commit capital to its first fund and construct a workforce to execute the technique. Not like established non-public fairness corporations, she had no administration charges to cowl working prices as no capital had but been raised. She needed to fund salaries and bills herself till traders got here on board. Finally, Aruwa closed its debut fund at over $20 million, attracting assist from Visa Basis, Mastercard Basis’s Africa Progress Fund and a number of other household places of work throughout Africa, Europe and the US.
In April this yr, the agency mentioned it had already raised $35 million for its second automobile, Aruwa Capital Fund II, which Okunbo Rhodes hopes to shut at about $50 million.
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One in all Aruwa’s most profitable investments from its first fund is OmniRetail, a platform that connects producers and distributors of fast-moving client items to casual shopkeepers, who account for greater than 90% of retail gross sales in Nigeria. The corporate additionally gives digital fee options and entry to credit score. For instance, a small store in Lagos can order inventory immediately by means of the OmniRetail app, obtain deliveries inside 48 hours, and use buy-now-pay-later choices to handle money circulation.
“It’s a enterprise that we stay very, very enthusiastic about when it comes to the expansion trajectory and in addition the best way that they’ve been capable of create this ecosystem that’s actually enabling the casual financial system to essentially scale and have entry to finance,” says Okunbo Rhodes.
(Learn extra on OmniRetail: Entrepreneur spots alternative in Nigeria’s casual retail market)
Aruwa additionally invested in Fastizers, a Nigerian snack meals firm based in 2010 by Debby Lawson, who began the enterprise with simply 960 naira – about 60 US cents at as we speak’s alternate charge. It has since grown right into a multimillion-dollar operation promoting cookies, biscuits, chin-chin – a preferred fried snack in West Africa – and extra lately bread. Regardless of excessive inflation and a weak foreign money squeezing Nigerian customers, Okunbo Rhodes highlights the corporate’s extensive product combine and established distribution community as strengths.
(Watch our full interview with Debby Lawson, founder and COO of Fastizers: Entrepreneur turns 960 naira (lower than $1) into nationwide meals enterprise)
Healthcare is one other space of focus. Aruwa backed MDaaS World, which started in 2016 importing refurbished medical diagnostic gear earlier than pivoting to run standalone diagnostic centres beneath the BeaconHealth Diagnostics model. The corporate now has quite a few centres throughout Nigeria and has expanded into Cameroon.
“The unit economics of those centres are simply phenomenal,” says Okunbo Rhodes. “You arrange a centre and it breaks even in a brief house of time. So we predict that should you’re capable of present inexpensive, high-quality healthcare providers, like diagnostics, in peri-urban areas – so exterior the massive cities – you might be actually capable of place your self in an trade with restricted competitors.”
(Learn our full interview with Oluwasoga Oni, CEO of MDaas: The entrepreneur who noticed a niche in Nigeria’s healthcare trade)
From its second fund, Aruwa has already invested $1.5 million in Yikodeen, a Nigerian producer of security and industrial footwear. Based in 2016, Yikodeen is addressing a niche in Nigeria’s security footwear trade, historically dominated by imports. Licensed to provide security footwear to Nigeria’s oil and gasoline trade, Yikodeen has capitalised on the rising enforcement of native content material laws and the rising demand for private protecting gear in vital sectors.
There have, nevertheless, been a couple of offers that crossed Okunbo Rhodes’ desk which she declined however later wished she had pursued. One was Moove, the Uber-backed automobile financing firm, reportedly in talks to lift $300 million in a funding spherical that would worth it at over $1 billion. One other was Moniepoint, the fintech agency that final yr grew to become Africa’s latest unicorn after securing $110 million from traders.
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Fundraising stays one of many hardest elements of working a personal fairness outfit, says Okunbo Rhodes. “Fundraising will not be for the faint-hearted. Getting international establishments to again you, again your agency, again your imaginative and prescient, again your technique – it takes time, it takes years of constructing belief, years of communication, years of follow-ups.”
But she in some way enjoys it. “Whenever you lastly get them, it’s very, very fulfilling.”
She describes her job as a relentless balancing act. “You’re fundraising for one fund, you’re deploying one other fund, you’re exiting one other fund, you’re hiring, you’re reporting, you’re doing investor relations,” she says. “Typically I really feel there aren’t sufficient hours within the day. Typically I really feel like I want three of me.”
