Patient capital is a powerful tool for impact investors. And within the African context, it’s a total gamechanger. Patient capital bridges the funding gap of early-growth stage companies, and enables stable investor relationships, sustainable scaling, resilient growth, and longer runways with responsible exits – all while supporting a company to deliver (and maximise) impact. In other words, patient capital powers a business’s evolution.

In Goodwell’s focus sectors, growth is inherently slow, but demand is consistent. And to address that demand, especially in sectors like agriculture and financial services that are sensitive to a range of external factors, portfolio companies need consistent, capable investors that can support their sustainable growth trajectory. While it certainly implies longer relationships, the results are worth it; let’s examine what patient capital can look like in practice.

A powerful player for financial inclusion

When Goodwell first encountered Onafriq in 2015, it was still called MFS Africa (meaning Mobile Financial Services Africa). At the time, MFS Africa was the largest digital payment network on the continent, connecting over 170 million mobile wallets through over 100 partners across 55 markets. We could clearly see their potential to drive financial inclusion while accelerating Africa’s digital economy, and eagerly joined their Series B funding round. The investment aimed to fuel the expansion of MFS Africa’s network and build capabilities for major retailers and internet companies to accept payments from consumers via their mobile wallets.

The company’s ultimate goal was to make sending money across borders as simple as sending an SMS. But the simplicity of that statement conceals the complexity of mobile money infrastructures, both regulatory and technical. “We already knew that it was not going to be an overnight success. They were building an entire digital infrastructure to connect mobile services with money services, while dealing with cross-border regulations. That requires time,” shares Goodwell co-founder Wim van der Beek.   

And that was time we were willing to invest. It paid off: MFS Africa delivered on their plans and steadily grew their reach. Following a series of acquisitions and investments in other African fintechs (including Baxi, a 90,000 agent-strong network facilitating financial inclusion in Nigeria), MFS Africa was moving from strength to strength. By 2021 its hub connected over 320 million mobile money wallets through more than 180 mobile money schemes, banks, money transfer operators, and over 250 global enterprises. Patient capital was proving itself. We re-committed ourselves to this approach in 2021 by co-leading MFS Africa’s USD100 million Series C funding round. 

From MFS Africa to Onafriq: An evolution worth waiting for

“We saw similar operators in the financial sector growing really, really fast within small segments of the market. MFS Africa, however, started with the ‘long tail’ of the market, building their network so that they could cover all of Africa. That creates a lot of value for their partners, but also requires patience (and patient funding) to build the regulatory and the technical infrastructure to make it possible,” explains Wim. To Goodwell, prioritising resilience over nimbleness made perfect sense for MFS Africa’s vision of financial inclusion.

In 2023, following significant growth, several acquisitions, and an expansion to the US market, MFS Africa rebranded to Onafriq: “The name MFS Africa, just like an old jacket, was getting a little tight for us as we’ve grown. We’ve expanded beyond just mobile financial services, becoming a true omni-channel platform across the continent and beyond,” said Dare Okoudjou, founder and CEO. By then, Onafriq’s network connected over 500 million mobile money wallets, 200 million bank accounts, and 300,000 agents in Nigeria, spanning 40 African markets.

The company is continuing to make an impressive impact. By the end of 2024, Onafriq had reached 4.4 million individual end users and significantly expanded access to financial services across 41 African countries, covering around 80% of the continent’s population. Its omnichannel payment network supports mobile money, cards, bank transfers, and agent networks, enabling millions of both online and offline users to participate in the digital economy. Both its impact and financial strength make Onafriq a powerful proof case for patient capital in impact investing.

Patient capital’s next steps 

It’s important to remember that while patient capital is patient, it’s not forever. It is still investing, and at some point, patient capital is no longer what’s needed. What does that mean when it comes to Goodwell and Onafriq’s relationship? Goodwell, after all, focuses on the early growth stages of a company, and Onafriq is quickly entering a more mature growth phase. We’re not afraid of the “e” word – after all, no investment should be entered into without a clear vision for a responsible exit. With this in mind, Onafriq is moving thoughtfully and deliberately towards a Series D funding round in the coming years.

For patient capital investors like ourselves, that patient mindset must further extend to exit discussions. Negotiating a responsible exit for patient investors requires some careful juggling. In situations like Onafriq, where years of time, money, and energy have been poured into the business, there first needs to be careful scouting for like-minded investors willing to continue the work and to further positive impacts. Then the company needs to fairly reward the exiting, early-growth stage, patient investors, while retaining enough money to meet obligations to their newinvestors in furthering the company’s growth. A responsible exit is a delicate balancing act – even more so when you’re intentionally dissolving a relationship that has been built together over years as patient investors.

In Goodwell’s case, these goodbyes might result in further investments down the road, in other funding rounds or perhaps in the founding entrepreneurs’ other ventures. Our most successful investments have always been founded on trusting relationships – and like good partners, they repeatedly prove themselves worthy of patience as you evolve and grow together.