By Tokunboh Ishmael
Alitheia IDF's work on gender lens investing to support women entrepreneurs in sub-Saharan Africa has provided several important lessons for impactful gender lens investing. In this article, Alitheia IDF's co-founder and Principal Partner (Nigeria), 'Tokunboh Ishmael, shares three important lessons on deploying gender lens investing to support women entrepreneurs:
1. Be intentional about outcomes
Investing in women goes beyond selecting businesses that fit the female-led eligibility criteria but should run the whole gamut of the investment cycle from eligibility through value-creation to exit, and from boardroom to factory-floor. For investors, driving intentionality of gender-based outcomes starts by injecting gender consciousness into the investment thesis, strategy, goals, and relevant metrics that can be tracked throughout the life of the investment. In supporting small businesses, especially women-led businesses, Alitheia’s approach is to assess the gender performance of a business at pre-investment stage and place the company on a spectrum ranging from Gender Negative to Gender Strategic, depending on the company’s level of gender consciousness and intentionality. This is demonstrated in Alitheia IDF‘S portfolio company, ReelFruit, where Alitheia has worked with Reelfruit to determine a path to being Gender Strategic with relevant metrics to boot.
2. Embed gender-lens into the investment process and business value chain
Achieving the desired outcomes forwomen requires the application of a gender lens at every stage of the fund’s investment process, and at every level of a company’s value chain. The Alitheia IDF gender lens toolkit, successfully operationalises the fund’s thesis of impacting women wherever they are economically active either as owners, employees, supply chain players (as producers, processors, distributors), or customers. This is particularly pertinent given the preponderance and critical role of women actors in the value-chain of businesses that enable access to essential/basic goods and services. Alitheia IDF’s (AIF) investment in Jetstream Africa, a tech-logistics platform. illustrates the strategic use of the toolkit to embed gender lens throughout all stages of the investment process, enabling AIF to better understand JS’s value proposition, create additional value, and set appropriate metrics to drive towards superior outcomes (especially for women), financially and otherwise.
3. Support for female fund managers
Women are underrepresented at the investor level where funding decisions are made with estimates from Africa, for instance, showing that women fund managers make up less than 25% of the total fund managers active on the continent. To effectively support female entrepreneurs and unleash women’s economic potential as entrepreneurs and consumers, it is pertinent to address the underrepresentation of women as decision makers in the private capital investment sector. Doing so, has the potential to correct the prevailing affinity bias in investing and drive superior outcomes. Women-led investment funds, such as Alitheia IDF, have spotlighted the potential of gender-lens investing and detriment of not recognising women as a key part of every economy’s nerve-center and source of power. However, to successfully unlock the economic potential of women in society, it is necessary to recognise the thread that runs through diverse representation at the decision-making level of funders, through to the businesses that benefit from their funding and the broader ecosystem of the value-chains of such businesses. Without diversity, running through this thread, society misses out on the dividends of diversity, the possibilities of inclusive prosperity and ultimately, the ability for society to reach its full potential.
A longer version of this article, co-written with Richenda Van Leeuwen, Executive Director of Aspen Network of Development Entrepreneur (ANDE), was orginally published by Impact Alpha.
