Great opportunities to invest in small businesses

by MMC
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Evelyne Dioh Simpa

Interview with Evelyne Dioh Simpa

Lives in: Dakar, Senegal

WIC Capital invests in small and medium-sized businesses led by women in the West African countries of Senegal and Ivory Coast. Betsy Henderson spoke with Evelyne Dioh Simpa, Managing Director of WIC Capital, about investment opportunities in the region.

Highlights of the interview include:

  • Opportunities in the food industry: snack foods, alternative proteins, and more;
  • How the provision of agricultural equipment and agricultural support services can be a lucrative business;
  • Why WIC Capital is optimistic about the region’s fashion industry; And
  • Outlook for investment in education.

Agricultural processing opportunities in snack foods, alternative proteins and more

WIC Capital recently invested in Peanuts and Cashews from Senegal (ACASEN), a processor of cashew nuts and other agricultural products based in Dakar. Its offerings include packaged nuts, cashew butter, snacks and honey. The company, started in the 1990s by current CEO Hermione Awouno’s mother, started as a modest business selling roasted peanuts and cashews. Over time, the business has grown and formalized, and is now run by the second generation.

WIC Capital’s investment will be used to increase production capacity and expand the team. Dioh hopes that with its second fund, WIC Capital can make a larger follow-on investment in ACASEN. Currently serving the Senegalese market, she believes that ACASEN has the potential to expand into regional and global markets in the future.

Overall, French-speaking West Africa agribusiness presents strong investment opportunities, according to Dioh. “I really think the agribusiness sector is actually a sector where Africa still has a lot of value to add and a lot of value to offer to the world,” she says. Although WIC Capital has backed snack company ACASEN, it also plans to invest in a beverage company specializing in natural juices.

Another area of ​​interest for Dioh is plant-based meats and insect-derived foods. It highlights an entrepreneur in Senegal who runs a company that produces plant-based meat alternatives from cashew nuts. “At some point you have to eat something other than meat,” she notes. (Learn more: West African Cashew – the next big thing in plant-based meat?)

There is also significant demand for natural cosmetic products – such as hair and skin care products – derived from agricultural raw materials, according to Dioh. WIC Capital has invested in the L’Arbre de vie group, producer of a range of hair and skin care products. What Dioh likes about the company is that it not only has its own brand, but also made white label products for other cosmetic companies. “We have so many local brands offering similar products… so it makes a lot of sense to position yourself as a supplier to these companies,” she explains.

Investing in agricultural support services

Dioh says that while investing directly in agriculture is risky, there are promising opportunities to support businesses that supply equipment and offer support services to the country’s farmers. Senegal And Ivory Coast.

One critical area is food storage. “Food storage facilities are still a great need and providing them can be very cost effective,” she explains. In Senegal, where the agricultural value chain is less developed than in Ivory Coast, many vegetables are currently spoiling due to inadequate storage.

Distribution and market access services for farmers also present opportunities in both countries, notes Dioh.

Global market for local fashion brands

Fashion is another area where WIC Capital sees investment potential. The company supported designer brand Sarayaa, which was already exporting its products to several international markets at the time of the investment. Since then, the company has experienced further growth in turnover.

In a previous interview with How we succeeded in Africaa representative of the West Africa Trade & Investment Hub also highlighted the opportunity to export high-end fashion products manufactured in Senegal to the United States under the African Growth and Opportunity Act, which grants access in duty free to the American market for eligible subcontractors. Saharan African countries. (Learn more: From canned catfish to high-end fashion: West African products in high demand in the United States)

For Dioh, there are also business prospects in developing infrastructure for large-scale, high-quality fashion production, as well as improving fashion distribution through physical and online platforms. “Access to the market remains a very big challenge, with many small points of sale,” she explains.

Additionally, she is optimistic about the market for professional clothing, such as uniforms, due to high demand from schools and businesses.

Education investment prospects: from schools to toys

Education is another area of ​​interest. WIC Capital explores investments in schools, digital learning platforms, companies that produce toys with educational value and publishing houses specializing in educational materials.

In the field of educational toys, Dioh highlights a brand that creates toys inspired by the local history of Senegal. Additionally, she cites another company, supported by WIC Academy (the company’s internal business training unit), which develops toys designed to help children learn math and reading. These toys can potentially be distributed not only to schools but also directly to families.

Investment guide for French-speaking Africa

For its first fund, WIC Capital is investing amounts ranging from $50,000 to $500,000 over an investment period of six to seven years. The company also holds two seats on the board of directors of all its portfolio companies and works to help these companies develop governance structures.

Dioh explains that WIC Capital operates in regions where the private sector is still nascent. Economies are largely made up of small businesses that need technical assistance. This is why, in 2020, the firm created the WIC Academy, which offers pre-investment training to companies that have not yet raised capital, and post-investment support to those that have received funding. Although most companies that complete the pre-investment program are not yet ready to invest in private equity, the Academy has proven to be an effective tool for preparing entrepreneurs for future WIC Capital investments.

The government is an important partner in identifying companies with investment potential in Senegal and Ivory Coast, notes Dioh. “If you want to find markets, it is interesting to talk with the funds that have been set up by the government or with the technical assistance programs that exist in the different countries.” She explains that entrepreneurs in these countries often look to government-backed resources before seeking financing opportunities in the private sector.

While there are many similarities between Senegal and Ivory Coast from an investment perspective, differences also exist. In both countries, SMEs have limited access to capital and technical assistance. However, Ivory Coast’s banking system tends to offer more loans to small businesses, while in Senegal, government and private sector initiatives to support entrepreneurs are stronger.

An important advantage of investing in Senegal and Ivory Coast is that they share the same currency, the West African CFA franc; are part of the same monetary policy area; and operate within the same financial arbitrage frameworks, notes Dioh.

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