TIDE Africa Fund I, a venture with a target size of US $100 million incorporated in Mauritius, has 10-year target life within a 5-year investment period. The fund will invest in companies that leverage on new technology to dramatically lower the cost of services ranging from agribusiness to financial services, energy, education and healthcare, expanding access to these services by households and enterprises. It will initially invest in Nigeria, Kenya, and Ghana, followed by Ethiopia, Rwanda and Zambia.
Designed to generate a 16% net internal rate of return to its investors, the fund is coupled with a significant development outcome driven by its focus on businesses providing innovative and affordable solutions for the base of the pyramid population (low-income households); its potential to create quality jobs for youth and women; and its financial and technical support to innovative businesses.
The Fund Manager, TLcom Capital LLP, comprises a team of experienced professionals with a combined 80 years’ experience in the technology sector, a strong track record in performing successful exits including two companies operating in Sub-Saharan Africa, and a sizeable pipeline of 600-plus companies with six companies ready for investments in the first year.
The Fund will support the development of an ecosystem facilitating growth of new technologies and new companies using proven technologies with the following development outcomes: promote the profitability of value-generating companies; stimulate job creation; and increase access and inclusion, including financial service by technologies and innovation. The Manager will also contribute to development outcomes by establishing the TIDE Foundation, a separate non-profit entity to support the development of the local entrepreneurial ecosystem through incubators. Furthermore, 1 % of the 20% of carried interest entitled to the General Partner is to be allocated to entrepreneurship education activities in Sub-Saharan Africa.
The investment is strongly aligned to the Bank’s Ten Year Strategy 2013-2022 and its High 5 priorities. It will: “Improve the quality of life for the people of Africa”, with the funding going toward technologies that lower the cost of providing basics services such as health and education to the underserved; “Feed Africa”, through companies that provide critical farming information, such as weather, market pricing, and farming techniques to farmers; lowering the cost of agriculture inputs through farm-to-market technology platforms and leveraging technology for efficient input distribution; “Industrialize Africa” through digitization of services, industrial processes via the use of computing, internet and mobile technology that ultimately increase productivity; “Light up and power Africa”, with the funding going to companies active in the renewable energy sector mostly in renewables, and with innovative business models to produce, finance, and distribute solar energy solutions; and “Integrate Africa”, with the funding going to companies providing cross-border payment solutions and technology platforms that link countries and entrepreneurs.
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