By: Hee-Dee Walenga
Bellatrix Investment Managers launched the Njaba Seed Fund in Windhoek yesterday evening.
The fund will target startups that are beyond the idea stage but lack the capital needed to scale their operations.
Speaking at the launch, Bellatrix Investment Managers Managing Director, Jesaya Hano-Oshike, explained how the Njaba Seed Fund was created to provide a solution to entrepreneurs in Namibia and the overall SADC region who are stuck in the purgatory between post grant financing and accessing capital from the traditional banks.
“It’s so difficult to get debt financing from the traditional banks. Even when it’s concessional, it still needs to be paid back and is not patient enough. That is the gap we are trying to fill,” Hano-Oshike explained.
Since launching in 2019, Bellatrix has gone from lending out N$500,000 in a year to disbursing N$96 million in financing last year. Bellatrix has supported over 400 entrepreneurs with N$240 million since its inception.
The Njaba Seed Fund will be a US$10 million fund that will seek to invest in between 30 and 50 companies over 10 years.
The fund will also exist to fill the venture capital financing between Africa, SADC in particular, and the rest of the world. Less than 5% of global venture capital funding goes to Africa. 80% of those funds are concentrated in Nigeria, Kenya, Egypt, South Africa, and Ghana.
“Most of the funding that’s available from our traditional decision investors, most of them being patient funds, goes to private equity. Little to none goes to venture capital,” revealed Hano-Oshike.
The fund will invest in South Africa, Botswana, Zambia, Angola, and Mozambique, from Namibia.
“Why are we based in Namibia? Rule of law and stability is key. That’s what Namibia is selling to the world and why it’s so popular with investors. We have a robust regulatory framework. We are the gateway to SADC with our ports,” remarked Hano-Oshike.
30% of the fund will be invested in 10 to 15 pre-seed entities with a ticker size ranging between N$400,000 and N$2.4 million. The rest of the fund will go towards seed capital for 25 to 35 businesses. This will cater to businesses who have early traction, a pro-market fit, and are ready to scale. These businesses can receive up to N$8 million in funding.
The fund will look to invest in the fin-tech, agriculture, healthcare, cleantech, education, and Software as a Service (SaaS) companies.
The fund will aim to achieve a gross internal rate of return of between 20 to 35% per annum and 2.5 to 4 times multiplication for investors over a 10 year period. Key drivers of returns will be early stage valuations followed by revenue growth and eventual exit via acquisitions, secondary sales, buyouts, and potentially initial public offerings (IPOs).
