What’s on Goodwell’s radar? - April 2025 Edition
It’s a brave new world: old alliances are collapsing, stock markets are ricocheting wildly, and global superpowers are exchanging TikTok-bullets in their latest trade war. This upheaval makes for a chaotic backdrop to daily life, but Goodwell is determined to keep making progress in spite of it. After all, it’s our mission to increase access to essential goods and services for underserved communities: no matter what the stock market graphs do, those goods and services are still necessary, and we are still committed to delivering them. Our determination is paying off: this past month, we shared news of our uMunthu Fund’s first exit from Baobab Nigeria. And while the world grapples with a fluctuating political climate, 2025 can also be a turning point to inspire innovation amongst African entrepreneurs.
Opportunities in the African tech start-up scene
With that in mind, this article from Business Day shares a clear rundown on where Africa’s technology startup ecosystem has been, and where it might go in the future. From fin- and agritech, to e-commerce and education, Africa’s tech ecosystem is brimming with promise – as long as certain hurdles can be overcome.
The psychology of innovation in Nigeria
Surmounting some of those challenges is a constant theme for businesses in Nigeria. Psychologist and consumer behaviour analyst Ifedolapo Ojuade shared some fascinating observations in a recent opinion piece, examining how Nigerian entrepreneurs – like our portfolio company, MAX.ng – are rising above the obstacles thanks to differing approaches to innovation: “While Silicon Valley start-ups enjoy capital and infrastructure abundance, Nigerian entrepreneurs have mastered something called constraint-driven innovation.”
A peer’s voice within the African market
This interview with Launch Africa’s Uwem Uwemakpan is a worthwhile read, closely echoing many of the dynamics we’re currently seeing in the market. “In our experience,” Uwemakpan shares, “especially in high-growth sectors, what’s often needed isn’t equity but debt—working capital to keep the business running and growing … how can we invest using debt instruments, take meaningful ownership stakes, and still position ourselves to exit at higher valuations and deliver returns to our limited partners (LPs)?”
VC fund performance report
Widely shared on our internal team channels, Carta has published its VC Fund Performance report for Q4 of 2024, sharing valuable insights into the current state of US-based funds. Significantly, the median number of LPs for VC funds between $100 million and $250 million has fallen to 47, a reduction of nearly 50%. However, LPs that are still investing in new venture funds are writing significantly larger cheques in a kind of ‘flight to quality’ phenomenon. Distributions of capital back to LPs are rare, and many venture funds now appear much smaller compared to later-stage private equity funds.
The role of concessional capital in agri-SME funds
Another report being shared across Goodwell is the Concessional Capital for Agri-SME Funds: Donor & Investor Guidance Report. In it, IFS examines how concessional capital can help close the USD 75 billion financing gap for agri-SMEs in sub-Saharan Africa. Of particular interest was their point that anchor capital – typically from bilaterals and foundations – is essential to launching funds. It usually makes up around 40% of a fund size, and 80% of junior tranches.