How to achieve at impact investing in Francophone West Africa

Brightmore Capital is an impact investment firm, focused on enterprises with a regional high-growth potential in Francophone West Africa.

Brightmore Capital’s Managing Partner and co-founder; Ndeye Thiaw recently chatted to Jessica Brown from Oxolo on impact investing in West Africa.

You can listen to the podcast here:

Cote d’Ivoire and Senegal are two of the fastest growing economies in the world right now. If you are not invested yet, you should be! Senegal’s GDP growth is expected to be 8% in 2023, while Cote d’Ivoire’s is expected to be around 6.2%. These are two countries with a large emerging middle class, both of which have needs that are currently not being met. Ndeye believes that part of the solution to this can be found through the local entrepreneurship ecosystem which is innovating, growing and primed for investment.

But one may ask, if Francophone West Africa is so primed for investment, why is there a history of hesitation?

Ndeye believes that recognising the potential of West Africa has never been the problem, but rather, it is the realisation of that potential that is where the challenge comes in.

Enter Brightmore Capital.

Brightmore Capital channels smart capital into local businesses that are improving and democratising access to services and goods in Francophone West Africa. They do this by sourcing investment opportunities, executing transactions and managing portfolio projects with the support of a vast network of stakeholders ranging from other fund managers, accelerators, bankers, and business service providers.

Location is key
Francophone West Africa is a region of over 130 million consumers. Historically investors have made the mistake of approaching the region holistically with a one-size-fits-all approach. However, unlike most investment firms that operate externally into West Africa, Brightmore Capital operates from within the region. This means that Brightmore Capital is uniquely positioned, not just in our understanding of the intricacies of the market and in our ability to identify growth opportunities and facilitate that growth, but also in our ability to reduce risk and, most importantly, in our ability to ensure return on that investment.

Brightmore Capital is positioned within and across all of the nine markets that make up the region: Cote d’Ivoire, Senegal, Guinea, Burkina Faso, Mali, Niger Benin, and Togo and we are able to view each area separately, taking into account their own unique business laws, varying consumer habits, different regulatory environments and the variety of challenges that investors and entrepreneurs need to be aware of and ready for. Brightmore Capital understands this and tackles these unique challenges daily.

“Brightmore Capital is uniquely positioned, not just in our understanding of the market and in our ability to identify growth opportunities and facilitate that growth, but also in our ability to reduce risk and, most importantly, our ability to ensure return on that investment.”

Do your due diligence
Operating in such a vast marketplace takes both time and patience. Brightmore Capital establishes, builds and scales one region at a time with proven results. We spend a significant amount of time on due diligence, and ensuring the right companies are invested in. We look at the financial returns first, before we look at impact. We consider whether the enterprise is in a growing sector and then we look at their financials, governance and processes.

If a company has the potential to deliver the desired returns, then we analyse what they would need to reach operational efficiency. We then position the company and equip them to move from one market to another. But only, once they are securely established in their original market.

Ms Thiaw explains, “70% of our pipeline is in Senegal and Cote d’Ivoire. Once secured there, we grow. Not before…We choose our portfolio companies carefully and then we invest in growing them. We make sure the companies we invest in have all the foundations necessary from the beginning of their journey, not only to survive and thrive in one region, but to grow across the region.”

Building ecosystem support
A key differentiating factor in the Brightmore Capital approach is ecosystem support. It has never been in place before – but it is now! We have spent a long time building relationships with business support providers both in the ecosystem and in the market. These are people and companies that have walked the walk and they have made themselves available to walk others through the journey.

For the first time, we believe that we now have partnerships in place that will provide the support that’s necessary for these early-stage companies to really grow and succeed.

Being positioned across all sectors, makes us uniquely equipped to do a real reading of the market and identify the key players. We are also able to apply our knowledge on how consumers will respond to the product or service in Senegal, as compared to Cote d’Ivoire for example.

Overcoming obstacles
At the end of the day you need to be in the game for the long-haul. Yes, this is a region with a lot of obstacles, but they are all manageable obstacles which are greatly outweighed by the incredible potential for impact and return. Any private company that’s created here has the potential to make a massive impact.
FEBRUARY 25, 2023