UK-based pan-African private equity company Jacana Partners is merging with Kenya-based InReturn Capital. Under the new brand ‘Jacana Partners’ a $75 million private equity fund is launched, targeting entrepreneurs running small and medium-sized enterprises (SMEs) in West and East Africa. Both Jacana Partners’ CEO Simon Merchant and Ezra Musoke of (former) InReturn Capital are Investor Members of VC4Africa, the biggest online community connecting African entrepreneurs and investors. Below Jacana Partners’ CEO Simon Merchant answers 3 key questions on the merger and the new $75 million SMEs fund.
How do East and West African businesses stand to benefit from the merger and the fund?
“The merger of InReturn Capital with Jacana represents a big step forward in private equity investment for SMEs in East and West Africa. By partnering with Jacana, East African entrepreneurs can expect to receive the support of international business veterans, as well as the local knowledge provided by the teams on the ground.
The new $75 million fund for SMEs – the Jacana SME Mezzanine Fund for Africa – means that more entrepreneurs in East and West Africa will benefit from our value added private equity capital. East African entrepreneurs will also benefit from the availability of more capital to fund the growth of their businesses, as the new fund will increase our investment size to between USD 1-5 million per company.
To date we have invested over $20 million in 20 portfolio companies in East and West Africa. So far, the companies we have invested in have created over 1,300 jobs.”
What do you offer that is different from the competition?
“Jacana is unique in three ways. First, we are the only private equity company with a business model that combines African professionals who understand their local markets and can provide close support to portfolio companies, with highly-experienced international private equity veterans (our Investment Directors).
Second, we are the only pan-African private equity company with a permanent commitment to SMEs; this means that our investment in building our teams and our investors’ commitment to helping us build our track record will not be lost to the SME sector but will continue to produce returns in perpetuity.
Third, our economic model. The fact that our Investment Directors are pro bono makes them affordable, and our founders’ investment means we can invest in building teams and track record in East Africa and across the continent for the long-term.”
What are your investment criteria?
“Our investment teams currently cover three countries in East Africa (Kenya, Uganda and Tanzania) and three countries in West Africa (Ghana, Liberia and Sierra Leone). Our objective is to provide long-term, flexible financing to support the growth and expansion of existing businesses with strong management teams. Typically this means businesses that have at least three years audited financials and a track record of sales and profits.
We can invest up to $3.5 million per company in West Africa and $1.5 million in East Africa. We do not have a sector focus but we are particularly interested in businesses in markets like financial services, property, healthcare, technology, business services, insurance, education, manufacturing and agro-processing. We are interested in supporting entrepreneurs who share our vision of creating large scale and successful businesses. In exceptional circumstances we can invest in early stage businesses and start-ups but only where management teams have directly relevant prior experience and where the business has a clear route to profitability within a short period.”
For more information, see the Jacana Partners website and their application process. Of course VC4Africa will provide updates on new announcements. For fundraising on VC4Africa, also see our 5 steps to fundraising.
Photo: Jacana Partners’ CEO Simon Merchant (centre) in between InReturn Capital’s Partners Ezra Musoke (left) and Anthony Gichini (right).