Aruwa Capital nears $50M target as it closes $35M for gender-focused fund II

Aruwa Capital Management, the Lagos-based early-stage growth firm with over $20 million in Assets Under Management (AUM) has secured $35 million for its second fund, Aruwa Capital Fund II, and is targeting a final close of $50 million, with a hard cap of $60 million. Founded in 2019, Aruwa Capital is one of Africa’s female investor-led firms, specialising in gender-lens investing. Its investment thesis centres on high-growth small and medium-sized enterprises (SMEs) in healthcare, energy access, financial services, and consumer goods, prioritising businesses that are either female-founded, female-led, or produce goods and services benefitting women.

The new commitments in Fund II reflect increasing confidence in Aruwa’s model. Notable returning backers include the Mastercard Foundation Africa Growth Fund and Visa Foundation. New investors joining this round include Nigeria’s state-owned Bank of Industry, British International Investment (BII), and EDFI Management Company through its ElectriFI initiative. BII’s participation is particularly notable, aligning with its broader $300 million strategy to back women-led funds globally.

The firm’s first fund, which closed at $20 million in 2022, demonstrated impressive performance despite macroeconomic headwinds. Aruwa reported that its 11 portfolio companies have collectively grown revenues by an average of 22 times in local currency terms since investment, with follow-on funding rounds occurring at valuations approximately seven times higher than Aruwa’s original entry points.

With the final close of Fund II expected later this year, Aruwa plans to continue deploying capital across Nigeria and Ghana. Adesuwa Okunbo Rhodes, Founder of Aruwa Capital Management, emphasised the fund focuses on sectors like healthcare and finance with the potential to deliver both outsized returns and measurable social impact. This approach aligns with Africa’s broader push toward financial inclusion and economic empowerment under frameworks such as the African Continental Free Trade Area.

The success of Aruwa’s fundraising is significant in a broader context for female entrepreneurs. In 2023, according to the Africa Big Deal publication, women-led ventures raised just above $200 million while male-led ventures raised $2.7 billion,13 times greater than their women-led counterparts. In absolute terms, the disparity between them remains staggering.

Aruwa’s ability to secure high-profile local and international institutional capital underscores a growing recognition that gender-lens strategies are both socially impactful and financially sound.

As Aruwa Capital approaches its final close and prepares to deploy its expanded fund, it stands at the forefront of a new wave of African investment firms marrying profitability with social purpose.