The Mastercard Foundation is Investing $150 Million into 20 Gender Lens Funds

Sam Akyianu: We believe that having women-led teams is a key way to catalyze capital into this continent.

Justin Norman: That's Sam Akyianu, Managing Director of the Mastercard Foundation, Africa Growth Fund.

Sam Akyianu: We're trying to be sure that we're not blindsided for all the issues that affect access to capital by women on the continent.

Eloho Omame: How far down, I suppose, that funnel, does the gender lens and gender diversity perspective go when you're thinking about allocating the capital?

Sam Akyianu: It goes all the way down. We can't just deploy capital and not be accountable for it.

Justin Norman: What does success actually look like for the Africa Growth Fund?

Sam Akyianu: If I'm gonna look back in two to three years time, what do I want to see, I want to see...

Justin Norman: Despite research showing that female founders outperform their male peers, startups with a solo female founder or an all female founding team raised a mere 2% of all the funding in Africa last year. There is a huge gender funding gap. How do we close it? This episode is the fourth of a five-episode series on gender lens investing, co-hosted by Eloho Omame, founding partner of FirstCheck Africa, an early-stage fund backing female-led startups. Each episode of this series will explore a different level of the fundraising value chain. In this episode, we're joined by Sam Akyianu, Managing Director of the Mastercard Foundation Africa Growth Fund, a $200 million fund-of-funds initiative with a particular focus on closing the financing and support gap for females.

Justin Norman: This series is created under the ScaleX Project co-designing solutions to close the early-stage gender financing gap in Africa, an initiative of Make-IT in Africa. Make-IT in Africa promotes entrepreneurship and innovation ecosystems across Africa for green and inclusive development. The program is implemented by the German Development Agency, GIZ, on behalf of the German Federal Ministry for Economic Cooperation and Development.

Justin Norman: Before we start, we have one small favor to ask. If you enjoy the show and want to support the content that we create, please hit that subscribe button. It only takes a second, but it will mean a lot to us if you do.

Sam Akyianu: We basically are looking to put $150 million in catalytic capital into 20 investment vehicles. And when I say investment vehicles, it's deliberate because we want to be able to support private equity funds, venture capital funds, debt funds, holding companies, and all types of investment vehicles that can deploy capital to SMEs. So that's why we use that term. Now, of course we have to talk about gender lens investing, and as I said, we are a catalytic fund to funds, and the way we are trying to do this is also to be sure that we're not blindsided for all the issues that affect access to capital by women on the continent. Of course, most people will know the figures, in America, about 1% of capital that goes to female founders, in Africa it's about 3%. But of course, the figures in Africa, the actual dollar figures are actually very low.

Sam Akyianu: So if you take a hundred funds and you're seeing only three of them that are female-led getting access to capital. And we've seen, and there's several studies around McKinsey and the World Bank and so on, have seen, have shown that actually having not your typical guys together taking a decision about investments can change the way capital is allocated on the continent. We believe that having women-led teams, having diverse teams, is a key way to catalyze capital into this continent. So we need to bring diversity into it, and that's the whole thing of gender lens investing. We are peculiar in the sense that the Mastercard Foundation Africa Growth Fund was established by the Mastercard Foundation, led by MEDA. MEDA is a development organization working across the globe. Between the two of us, we believe gender has to be democratized, it has to be distributed across different types of people. And in Africa, SMEs are the ones that are going to benefit from this increased access to capital. So broad targets, get capital into the investment vehicles, get that capital out to SMEs, and ultimately those SMEs have to grow their revenues as an impact measure, and, most importantly, create and sustain jobs. Jobs for women and jobs for youth on the continent. So that's what we want to do. Tall order, but we believe that by the way we structured ourselves, we will be able to deliver on that.

Justin Norman: So far publicly, you've committed to making five initial investments into other funds. Can you talk a little bit about, I know they're different across all of them, but about those funds and the decision to invest in them?

Sam Akyianu: We've done five commitments to five different funds. The first one was based in Nigeria, but it's covering Nigeria and Ghana. It's a woman-led fund, not a very big fund, but that's exactly where we need to be, a $20 million fund puts in a little bit to help them get across their line, to close their fund. And they've been able to deploy capital to nine SMEs across West Africa. Now, the second one we did is a fund, which is actually quite unique. This is a fund that is based and registered in Uganda. Uganda is not your typical domicile for funds in Africa because most funds in Africa either have to domicile in Mauritius or have to domicile in Luxembourg or Delaware where the funding is coming from. The Mastercard Foundation Africa Growth Fund is making it possible for African domiciled funds to access funding from us. And again, we don't invest in these funds on our own. We're open to having other investors. In fact, we welcome having other investors alongside us. So this second fund is in Uganda. It's again a women-led fund, and they're focusing on supporting SMEs in the agri space, but across other real sectors as well.

Sam Akyianu: And we think that this is a critical way in which we are providing catalytic capital onto the economy because it then become a thought leader in terms of an opportunity for other investors to come in. That investment is unique in that it's the permanent capital vehicle, so it's not your typical 10 plus one plus one fund. And we have been able to commit significant capital to that for them to continue to deploy in that market. Then our third investment is in a fund that travels across East Africa and West Africa. This one is a diverse team so you have a woman and a man partner that have basically come together to form a fund. They're not first-time fund managers, they've done this before, and this is their second iteration. We're investing significant capital to enable them catalyze at the capital commercially on the market. Then we have another fund that's focusing on the agri space, working in Tanzania, and looking to move into other countries in East Africa.

Sam Akyianu: Again, we've been able to provide certain instruments, certain investment instruments that enable them to continue to do what they're doing and be able to provide short term debt and long term investment capital to businesses at that level. And then we have our final one that is looking at the venture capital space and is going to be doing this again from East Africa and West Africa, a woman-led fund. And we're happy to be supporting all of these investments and again, looking to catalyze other investors alongside us to make this a success. I must also add that our method of implementing is quite unique. We implement as a group of partners. So while MEDA is the lead fund manager for the fund, our pipeline is driven by IMP. IMP is our fund advisor, they basically develop the pipeline of investment vehicles, begin to screen them, bring them to our independent investment committee, independent investment committee gives a go-ahead for them to go for due diligence, and then comes up for a second level of recommendation. And then we have a MEDA Foundation council that provides approval for that. So this is what we've done so far, 35% of the capital is out. We're looking to be significantly ahead in 2024. We're going to have to move the needle on how many investment vehicles we've been able to invest in over the period.

Eloho Omame: It sounds like in the objective of deploying catalytic capital, there is a dimension around how you think about the returns on that capital, one which sort of touches on sustainability. You reference growth so ultimately, for example, in these SMEs, the idea that they grow and they can continue to grow and sustain themselves. And then also, as part of that journey and part of that path, their ability to then create jobs and to hire, because the companies themselves are sustainable and they're growing. My question is really back to this idea of having multiple different kinds of investment vehicles, some of which I think more readily lend themselves maybe in some timeframe to those objectives than others. For example, when you talk about venture capital funds versus private equity funds versus SMEs funds, some of those, I would imagine some of those lend themselves to investing in companies where you might immediately see their ability to, for example, turn cashflow positive, hire lots of people, versus others. How do you sort of balance those objectives within the portfolio that you're building?

Sam Akyianu: So I think that's exactly why we're catalytic and our investment policy is actually designed to look at the range of opportunities that exist in the market. So we shouldn't go into the market and do deja vu stuff, investing in big growing companies that have had private equity firms in them for two to three years. We're looking for the investment vehicles that we invest in to drive what they invest in. As I mentioned, the five different investments that we've made so far straddle across venture capital, which is gonna be working with potentially some interesting companies, innovative companies, some startup companies. And then you have some of the more traditional private equity funds like the first one we invested in that is working with SMEs, growth SMEs across the continent. But in all of this, our target is to use all the resources that are available to us.

Sam Akyianu: And we do have considerable resources in terms of support for the investment vehicles and support for the portfolio companies. So our BDS partner, ESP, is basically established to be able to go to a fund that we've invested in and help them even in their pre-investment support to portfolio companies, to say, Look, we have this pipeline company that we want to invest in. We've seen a couple of hurdles. Maybe they need that expert to help them unwrap certain operational challenges that they're going through to be able to be competitive. Maybe they need to reach certain standards of operation to be able to be export-ready. Maybe they need support to be able to go into an additional country to be able to expand their market-base. Those are the kinds of things that are our BDS support is going to be doing to make a difference.

Sam Akyianu: So your traditional P investor, institutional investor, LP, will make their commitment. And basically the next thing is really, Okay, let's agree on management fees, let's agree on the next capital call, provide the capital, and the fund is then basically on their own in terms of how they develop and how they make the investments that they make work. We are different in that we're still there to support you post-investment, with significant BDS resources, but it is led by the fund manager. The fund manager has to say, This is the strategy that the portfolio company is going through, and this is how we think they need support. So our support in technical assistance is not CapEx. It has to be something that is beyond CapEx. It has to be something that is around overcoming a hurdle to enable them reach better markets, to enable them be able to gain better revenues or to be able to support more jobs, which is an important aspect of what the Mastercard Foundation Africa Growth Fund is set up for.

Eloho Omame: A quick follow up, one of the things that you've made very clear, and I don't know if it's a strict criteria, but you've made it very clear that when we look at the funds that are currently within the portfolio, they're either female-led, so female GPs, or they're diverse teams. It sounds like that is a prerequisite, right? This idea that it's capital in the hands of women and women are deploying the capital. And that in and of itself obviously drives some impact in terms of just ultimately the opportunity set that those fund managers are looking at, and I suppose the way that they they look at businesses, etcetera. Do you also then sort of look at the impact that happens at the portfolio level and also look for that gender lens at that level? So are you saying, for example, as you talk about jobs, I beg your pardon, that's come up a few times so far, do you also have some objectives and some guidelines around the diversity within the jobs, perhaps management jobs versus more junior jobs? How far down, I suppose that funnel does the gender lens and the diversity, gender diversity perspective go when you're thinking about allocating the capital to individual funds?

Sam Akyianu: It goes all the way down. So in addition to our fund advisor, BDS partner, gender partner, we also have a monitoring evaluation and research and learning partner that keeps us on our toes in terms of what are we doing. Are we investing in the right funds? Is the trickle down effect that you're talking about happening? And of course we have targets that have been set for us so we can't just deploy capital and not be accountable for it. We have to be able to see at the portfolio level that X number of jobs have been created. And in addition to the, let's just say the traditional desegregation of gender, we also do a desegregation of youth and women. Are they for youth? Are they for women? Who's benefiting from those jobs and how are you sustaining those jobs over the lifetime of your investment? We look at all of that. Then of course, even for the investment vehicles, we're looking at things like, who's on your investment committee? Do you have a diverse investment committee, and is this rich with the knowledge that you need for the sector that you're going into? For instance, if you're going to be a VC investment vehicle, we want to see some VC people on your IC.

Sam Akyianu: So it's not just a collection of people. We're not doing tokenism here. Now, one thing I must say is that, some of the funds that we look at are quite surprised by the fact that they have actually met some of the gender lens goals themselves without even counting. So you begin to ask them, Okay, do you know how many women-led businesses you have? They go back and check and they're doing quite well. What kind of job numbers are you creating? They do the disaggregation, and they're doing quite well as well. So it's up to us to continue to reinforce that this is what we want to do. And we're not, again, we're not coming to catalyze the market by spoiling the market. We're not displacing traditional investors. We're saying we will only do 20-40%. At a pinch we can do more, but we will mostly do 20-40% of the funds we invest in.

Sam Akyianu: So we definitely have to do it in a way that is attractive to other investors in the market, whether they be local pension funds, DFIs, or whatever. And all of them are moving towards the importance of gender, and the importance also of having commercial sustainability alongside any impact investing theory that you put out there. So any impact investing theory that does not have commercial sustainability is going to fail 'cause you have to have invested in an educational institution that can continue to help young people to grow their educational pathway. You have to have a hospital that is sustainable to be able to continue to help sick people. So that's how he feels.

Justin Norman: I'm really curious in terms of the feedback you're getting up the chain. You've talked a lot about being a catalytic capital. You've talked about, I think, all of the various support organizations and entities that you can put around funds and around the portfolio companies. We were talking earlier, you mentioned venture capital, and in developing a VC fund's pipeline, they may see 25% or less of female-founded companies. I'm curious to know how you think about what the ecosystem needs, what else needs to happen beyond just capital from a pipeline perspective, for example, to actually reach the target goals that you guys have as an organization?

Sam Akyianu: We started this program, like I said, 18 months ago, and opened up an applications portal and found out we are inundated with applications. And these applications, some of them were not actually investment vehicles. And so what we're seeing is that there's a huge demand for this, and of course the Mastercard Foundation name is very powerful and so it draws a lot of applicants to us. And now what we're finding is that how do we manage that funnel of investment vehicles that are almost illegible to get funding from us? Because yes, we are using a commercial criteria, we are using an independent investment committee made up of investment professionals in their own right that also have their reputation to protect. We want this to succeed, and that's why we're using that process. So what we're finding is that there's gonna be a whole basket of investment vehicles that we have to handhold.

Sam Akyianu: We have to help them in some way to become the investment vehicles of the future. We're thinking of having two or three other entities where we say, Look, we have these 20 investment vehicles that we think are close to investment readiness but there's a couple of rough edges that we want you to clean up for us, maybe over the next six months or eight to nine months. And we will support that to help those vehicles do that. Now, you mentioned the ecosystem. Yes, so we are not doing it only for ourselves. We're going to look at those investment vehicles that we are interested, but we're also going to look at who are those other investment vehicles that are out there that may not fit our criteria or are not in our sphere of investment. For instance, some of the mature funds that are in the market and so on, and begin to say, how can we help the whole ecosystem to get better at being able to attract capital onto the economy? 'Cause ultimately that's what we want. So we're going to be supporting these separate programs from ours that can then provide the support to investment vehicles because the demand is huge and we're not going to be able to provide capital to all of them, even though we have the best intentions in the market.

Eloho Omame: Sam, I want to come back to something that you touched on, you've touched on it in a few different places. This notion of investing in a vehicle or deploying capital via a vehicle, committing to a vehicle. And then first level criteria is the, who makes the decisions, who makes the investment decisions, whether at the GP level as well as at the investment committee level, and then the trickle down that you described. You also touched on the fact that very often a GP who may not necessarily have an explicit gender lens strategy finds that actually their existing portfolio already meets the criteria, and therefore you can potentially evaluate them as a potential destination for your capital. As I think about that kind of dynamic over the long term, I say to myself, How do you think about the GP's explicit commitment to kind of helping you achieve your own objectives over the long term in a dynamic whereby perhaps having met the objectives initially is incidental? It's a good thing, of course, but it's potentially incidental.

Eloho Omame: And then you're going on this sort 10-year or so journey with the GP, and you're saying, Now we're going to assist you to start to measure these things a bit more systematically over time, we're gonna support you to be able to achieve them. There's a potential for a natural tension that whereby the GP says, Well, hold on, I didn't start off running a gender lens fund. I suppose the first question is, how do you think about it at the outset and how do you make sure that the commitment is really there as opposed to incidentally there? And then over the long term, how do you think about this idea of mindsets and strategic shifts, et etera, where that might've been an issue to begin with?

Sam Akyianu: That's a difficult one, and having come from the private equity industry, blowups in funds is not something I'm not aware of. Funds do blow up because partnerships blow up, and sometimes it could be for the same reasons that you're speaking about which is objectives and of course targets and investment strategies and where should we focus? Should we focus on low hanging, high-end fruits, or should we focus on the broader base of investment targets? So we do our best, right? We try as you might, you can have an evaluation criteria and people can prepare for it, but I think one of the reasons why you go on due diligence and engage with fund teams is really to understand, look people in the eye and get a good feel of what their commitment is to this. And I think what we're saying also is that we strongly believe that a gender lens investing strategy should not take you away from your commercial sustainability or your profitability strategy.

Sam Akyianu: If we do the right selections, if we're selecting the fund managers or the investment vehicles based on their investment strategy, their team composition, and their own outlook for where are we going to make money, and with the support that we can give them on gender diversity, equity and inclusion with the support that we can give them on business development services, we believe that together we'll be able to chart a path that is sustainable for all of us. We really hope that when we engage with people on due diligence and we lay out our vision, that their investment strategy basically ties in with what we want do. And the long-term goal for all of us is to be able to continue to deploy capital, to be able to deploy value creation services to businesses. So hopeful that we will be able to create a carta of investment vehicles that see this new space, see this new type of investor like the Mastercard Foundation Africa Growth Fund, as a continuing thing to be able to continue to provide capital to them.

Eloho Omame: I'm thinking to our own investment criteria as a venture capital fund at TLcom Capital, and there's a line when we kind of talk to founders, so to your point around you kind of look people in the eye. When we look people in the eye, we look for what we call alignment with a venture mindset and the different dynamics to it. It's something around level of ambition. There's something around how big can this get. But it's really ultimately to your point, the commitment of the founder to a vision that needs to kind of look a certain way in order for it to deliver our objectives as an investor that's going on a partnership with them over the long term. So I'm curious as to maybe there's an analog or there's something that's a bit analogous to that as you think about your own investment criteria, something that when you look the fund managers in the eye, something that you are looking for or anything that you might consider a red flag or a green flag from that perspective.

Sam Akyianu: So Eloho, I see you're trying to put me on the spot to say what we... How we decide. I'm going to skirt it. The reason is this, there's no magic wand and you know this, right? 'Cause we are being catalytic in the market, we're finding our target market is early stage investment vehicles. So fund managers who are doing their fund one, fund managers who are just starting their first fund and so on, are moving from their first fund to their second fund. You can more readily get where they want to go, and sometimes you have to try and tease out a few things and prop them in a certain way to see what comes out of that. That's really the fund advisor's job. But eventually it does come to us on the investment committee and we look at it and determine to see whether the right thing has been done.

Sam Akyianu: And of course, you might have some mistakes in the future, but we believe fervently that as we continue to do this, the same way that the investment vehicle must look and have a conversation with the portfolio companies they're going to invest in is the same way that we should have that look and bonding with the investment vehicles that we invest in to see that they buy into the strategy and the vision that we have for long-term success. For instance, the issue of jobs, it is an interesting discussion and then to go further to say, Well, okay, those jobs, let's see how many youth are in there. Let's see how many young women are in there and all. Those are difficult discussions that we have. But we also encourage them to say, Look, we're not going to leave you to do this on your own. We're going to be there with our BDS support. We're going to be there with our gender diversity and equity partners supporting you to push down this road and help you across the difficult hurdles that you might face.

Justin Norman: Can we talk a little bit more about what success looks like then? Obviously there's all of the outcomes that you've talked about and there's a sort of wide range of them, but maybe there's also what success looks like for the Africa Growth Fund itself and sort of the diversity of objectives. Strictly financial returns, which are not necessarily at odds with all of the other things that you're measuring, but how do you measure success and what does success actually look like for the Africa Growth Fund in the context of everything that we've talked about thus far?

Sam Akyianu: If I'm gonna look back in two to three years time, what do I want to see? I want to see diverse investment vehicles, some that are growth funds, some that are early stage funds, some that are tech funds, some that are SME debt funds, some that are holding companies. I want to see all of them deploying capital in their way into different SMEs across the continent. So first, you want to be able to address this issue of shortage of capital for female fund allocators, for SMEs on the continent, you want to address that. That's one thing. You want to also address value creation, so making a difference after the capital has gone in and growing them from one level to another. We want to see that these businesses have grown, if it's a school from a hundred pupils to a thousand pupils or whatever it is that that measure is.

Sam Akyianu: And then of course, again, it comes back to the jobs and we're not dissociating the two. We're not saying go and create jobs but don't create revenue or profits because if you don't create profits, you're going to grind to a halt at some point. Even if you have donor funding, you're going to grind to a halt at some point. So for us, success is how much capital have we deployed? How many different types of investment vehicles have been able to access these. Then at the SME, I want to see, have they grown? Has value creation supported them to grow? And if they grew, then have we seen a commensurate increase in jobs and have we seen the disaggregate in jobs that we want to see. All of these things together is going to be our success and I think another thing is going to be capital that we leverage.

Sam Akyianu: We have $150 million to put into investment vehicles. If we leverage this three or four times, that's still more significant capital into the continent going into SMEs to create the change that we want to do. And if all of them are working towards creating jobs, then we're working towards solving the job issue on the continent. We're working towards making livelihoods better. We're making people's dreams come alive as to what they can do. There's some very great entrepreneurs out there that are struggling to get capital. Maybe they won't get capital directly from us, but through all the things that we're doing, we'll be close to getting capital and seeing examples of successes. This is another thing which I think we're lacking in Africa, successes of SMEs that people can relate to and not having to look to big international companies making successes, but seeing actual companies that have taken money from private equity firms, from venture capital firms, from SME debt funds, and being able to turn that around to create a good business and a standard business, I think is what we're looking to see.

Justin Norman: Maybe it's a little bit, the measurement aspect is a little bit more art than science in some cases. Is gender lens investing an a female founder, all female founders, female fund managers, female customers, female job creation. I'm wondering how you think about, or do you think about that sort of degree of nuance in measurement as well in determining what success looks like? Or is it just everything is okay if all of the successes that you see in two to three years times as you just explained bear out in the way that you hope that they will?

Sam Akyianu: I think there's always a science beneath it. When it comes to the gender lens investing side, just in all of it counts. Whether it's a female fund manager, whether it's a diverse senior management team, whether it's a diverse portfolio of women-owned businesses versus male-owned businesses, all of that is important. And we need to begin to show the narrative of having followed the gender lens investing principles. What have we come out with? Have we come out with a portfolio of funds that are commercially sustainable? In terms of return for us, yes, we have our expectations, but we're not expecting 20% return from every investment vehicle that we invest in. We do follow most of the principles of investing in funds, but we are also very realistic about the types of returns that we want to see, and also how much impact we want to encourage our fund managers to pursue in the market.

Justin Norman: Yeah, and I've been, I guess, stuck on this question of what is the actual goal in the gender lens investing space? And maybe there's not broad consensus and is it too narrow to say, Well, we wanna close the gender financing gap or unlock more capital for women funders? And it feels to me, actually maybe that question of just sticking strictly to money raised as a metric is way too narrow. And maybe the answer doesn't really matter. It is in all of the above type of situation here.

Sam Akyianu: I think it's all of the above. I think all of it matters. I think you should allocate more capital, more broadly to different teams. And as I said, we're not exclusive to women. So we do want to see capital going to both male-led teams, female-led teams, diverse teams. But we want all of them to begin to look... Not be blindsided to investing in female businesses, whether it's the products that they make or whether it's the leadership of the company. And so for all of that to work, we need to be able to count everything. What difference are we making by adopting a gender lens investing path? And are we doing this to make a difference? Yes, we want to make a difference. Now, am I very sure that we're going to make a difference? I'm confident that we will, but I can't say for sure until I've done four years of this and I can show you that look, in the first five funds that we invested two years ago, this is where they are. This is the number of portfolio companies that they have. This is the value creation that we've seen happen.

Sam Akyianu: This is the job growth that we've seen in these particular companies. So the answer is gonna be in the near future, but we do need to sow the seeds today. And as I mentioned also, where are the fund managers of the future going to come from? We need to begin to support them through the handholding program that we're going to outsource, accelerator program that we're going to do. Take them, build them up, and hope that we can invest in them in the future and others can also invest in them.

Justin Norman: The one other question that I was thinking about, certainly apart from the $150 million that you're committing to other funds, there's a whole considerable investment in the ecosystem, with all the partners investing in monitoring and evaluation. And I'm curious, obviously the need for the ecosystem to be built, Mastercard Foundation is very privileged to have tons of resources to be put above and beyond just like the actual capital. Do you, in your sort of view of the ecosystem or dealings with other funds or founders, have a perspective on this question about measurement and the ability to measure and the commitment to all of this other sort of non-financial resources from an ecosystem approach?

Sam Akyianu: It's not something that we leave alone. So for instance, for each of the fund managers that we onboard, we do have a kind of platform system that enables them input information. And just to be clear, the information that we ask for is not only for our use, it's also for the use of the fund manager to understand how their portfolio is performing. So what we get is a spinoff of what they get and what they digest to determine whether their portfolio is performing. Those results are not only coming to us, but they as a portfolio company can say, Hey, my revenue, individually on their own, my revenue grew from this level to that level. My jobs grew from this level to that level. I am ESG compliant. I have proper governance in place because my fund manager or my investment vehicle supported me to do that. That's the way we're thinking about it. So we're trying as much as possible not to make it a cost on the portfolio companies that we're trying to grow, but make them also see the benefits of having all of this information and using that information as they will grow and go and find other investors as well.

Eloho Omame: I want to move a little bit in a slightly different direction and just get your take on this idea that we've come across in the ecosystem around female entrepreneurs. This phrase that is kind of bandied around a bit, female entrepreneurs in Africa are over-mentored and underfunded. Curious the extent to which you have sympathy for that notion. In particular, I'm conscious that you're deploying capital to the fund managers, so you addressing the imbalance if indeed there is one. But this notion that the female funders feel a sense of fatigue around the programs and the what have you, beyond the just deployment of capital to allow them to build the companies that they want to. What's your kind of perspective on that and to what extent do you think that's a fair pushback or fair feedback from the female founder ecosystem?

Sam Akyianu: I feel that as I engage with female fund managers, what I'm seeing is that there are maybe two different supporters of the different types of two female fund managers or female businesses. And one is the kind of donor program that is doing a training program that doesn't have capital related to it. And the other is your, on the other extreme, maybe a DFI program that is looking to provide capital. And I think sometimes the blame is shared amongst everybody to say, Donors are doing this, and then donors and DFIs and everybody's clustered together and the blame is thrown out there. So I think the Mastercard Foundation Africa Growth Fund is a good example of bringing both of those things together. Philanthropic capital, blended finance, technical assistance, everything is in our pots. And as I've said, we're even looking to see those that we think we can't invest in today, how do we handhold them?

Sam Akyianu: And we're not just sending them to any trainer, we're going to send them to accelerators that are focused on getting them to the point where they can be investor-ready. And investor-ready means that then we can look at them to provide capital. We also have this in our investment policy to support female fund managers with working capital support and warehousing capital support. But again, it's not an entitlement. You have to earn the opportunity to get that. And so we want you to come through our typical screening process. Our investment committee will have to view you and be sure that you're committed to doing this. And then we can potentially commit to a working capital support to help you build your team up. And at the same time, we may even send this extra accelerator program, give you some working capital to be able to continue to survive, to put the right team together and do it together.

Sam Akyianu: So my answer to your question is, yes, it exists. There's lots of trainings. You can spend a lot of money going around trainings and workshops and events and so on as a female fund manager or as an early stage fund manager trying to raise capital. And if you don't target it right, you can spend a lot of money that we are not and still not get capital if you're not getting. So all we're trying to do is bring all of that together and say, We're going to help you to do this, but we are a commercial investor and we are a commercial investor for the right reasons. We don't want you to be seen in the market as a token investment. We don't want you to be labeled as a Mastercard investment and therefore you're not really useful to other investors. We have to do this together. And Justin, I think you also mentioned something about resources that we have for the ecosystem. It's a fraction of the investment capital, but we're trying to make it work as much as we can on the continent. And yes, we are looking for opportunities to do both things that can change the game on the continent. And we continue to look for partners, look for ideas from the venture capital associations to be able to do more on the continent.

Justin Norman: Is there also a relationship like LP to LP? Are you having conversations with other LPs to say, This is what we're doing and we need your participation as well? Because as you said before, we're not taking more than 40% of any given fund and so we need you guys to step up too.

Sam Akyianu: All the time. All the time we speak together. Of course the DFIs, my former employers and colleagues and IFC, we're almost looking to be like the feeder fund for them. So the funds that we invest in, if we do the right job with them, if IFC is not gonna invest today, or if FMO is not going to invest today or Proparco or the other, that by the time they get to their next fund, those sources of funding, we are looking at them to say, Oh, these guys are well established, or these... I said, guys. These female fund managers or these diverse teams are well established. They've been able to develop a portfolio. How can we come in now and make them bigger? That's what we want to do. So we're working on that. We also have a crop of philanthropic capital partners that we're working with currently, and we continue to build comfort with them.

Sam Akyianu: Our fund advisor engages with them to update them, especially after we close with the fund. We have other investors want to hear, how did your due diligence go? How far are you going with this fund? What kind of investment instruments are you deploying? Because sometimes it's the fact that we can provide certain instruments that other investors cannot provide, and we can provide equity. We can provide concessional debt, first loss commitments and so on, and all of that. That sometimes help other investors to come on board. And we intend to leverage on that a lot to be able to get other investors alongside us.

Justin Norman: For each episode of this series, my co-host, Eloho Omame and I sat down for a retrospective conversation to reflect on the insights shared by our episode guests. I think maybe it would be particularly interesting to juxtapose your experience at first check and fundraising, which may be a unique experience relative to some other female focused investors. What we see in organization like the Mastercard Foundation, for example, committing a large amount of money towards gender lens investing and impact investing generally, which I think is a great thing. And inside of that, there was a whole bunch of measuring that Sam talked about to understand what success looks like and hopefully to crowd in more capital. But how do you think about the need, obviously to convince more LPs to invest...

Eloho Omame: More commercial LPs?

Justin Norman: Well, I think LPs in general. We talk again about this 2%. To get to 50%, we need whatever sorts of LPs, whatever their purview. And maybe that's what the conversation needs to be about is there's a lot of DFIs in particular that say, well, this makes sense from an impact perspective, but also a commercial returns perspective. And maybe the conversation needs to shift beyond that in the context of gender lens investing to also, Guys, we're at 2% in order to get to 50%, we need to figure out a way to get more commercial investors who don't necessarily explicitly look at gender lens investing but as Tokunbo said previously, this is a bankable commercial opportunity. So yes, I might be a gender lens investor, but I'm not strictly impact in that way. So the narrative in fundraising evolving from strictly gender lens as an impact opportunity to... No, we are fundraising to invest in women because it leads to better commercial returns than without a gender lens.

Eloho Omame: I agree.

Justin Norman: And because that's largely the thesis for FirstCheck, is it not?

Eloho Omame: It is a hundred percent. In terms of FirstCheck Africa, I think, interestingly in fundraising didn't necessarily struggle to get people on board with the idea that diversity has a performance dividend in the companies. It was interestingly, where we tended to get a bit of resistance was in the idea that you can build... So FirstCheck Africa is a little bit unique in that very clear that it's technology, technology enabled businesses, and it's not a multi-strategy, but that was where the tension was. Are there enough technology focused propositions led by women to justify the existence of a fund like yours? We think that the answer to that is yes, especially at the levels of capital that we're talking about for fund size for FirstCheck Africa. But maybe we are somewhat unique in that because I think we're one of two, maybe three technology focused funds, female-led. Others tend to have a bit more of a multi-strategy. Maybe it's in response to feedback 'cause they have longer tenures in the market than we do. Maybe it's in response to feedback from market that those don't exist. At the same time, I think also the number of technology ventures in general across Africa exponentially increased last year, etcetera. So it's an interesting one. The pushback tended to be, look, is the funnel big enough for this to exist? I think the answer is, yes.

Justin Norman: Yes. So you never considered a multi-strategy approach. It was always, especially for you and ODU, your technology people, so why do anything else?

Eloho Omame: Exactly. I'm not sure that for us, we would have number one, been able to evaluate businesses that looked a little bit differently. Number two, there was also this question around what do we like? What do we enjoy? Which is the benefit of starting up as a bit of an angel fund. You can kind of do what you want. And I think those two things were sort of top of mind. And number three, I think there's also a piece around when we think about... 'Cause it's a fund, yes, but we have a mission. There's a mission around representation, which we're prepared to be very patient about. I'm very, very excited about a view of the future in which you put a picture up of the most inspiring entrepreneurs coming out of Africa, and there's more women. I'm not sure today that there will be too many women in that list. Maybe Odu'a is an obvious one, but I want to see more.

Justin Norman: And she's on every list. 

Eloho Omame: And she's on every list. So we both... Odu'a and I have a mission to reduce the occurrence of Odu'a at least have other faces with Odu'a and I think that's it. I like that as a goal.

Justin Norman: Yeah. So in speaking about the Mastercard Foundation specifically, we talked a little bit about this earlier as well, this idea of the importance of measurement in the context of how big of a gap there actually is. This might be a bit of a controversial question, but I sometimes can't help myself. But to hear what's going on, and this is maybe something that I struggle with in the impact space generally, but there's so much resources allocated towards monitoring and evaluation specifically, and if we want to increase the amount of capital going to female founders, would it just be better to redirect all of the monitoring and evaluation money towards deploying capital?

Eloho Omame: So it comes back to this point, which I was surprised that it was Yamo making the case just given how front and center venture the businesses she shared that her cap table doesn't have any gender lens funds, etcetera, etcetera. But it comes back to this point around you can't move what you don't measure. And so my answer to the question, as much as my instinct is to agree with you a hundred percent, my thoughtful answer to the question probably is that there's probably something in terms of shifting the balance a little bit better in favor of deploying the capital into the companies, but some slice of that capital does need to be in the area of measurement. I think speaking though of the balance of capital, this concept that we talked about a fair amount as well in some of these conversations, and we tested this with people, was this phrase, female founders in Africa are over mentored and underfunded. A big chunk of the capital goes into mentoring and acceleration programs and investment readiness programs and all of these things. And I think that comes from a place in which our narrative in which we say to ourselves that people are not starting from the same whatever lines. The companies that tend to be female led from jump, they are at somewhat of a disadvantage because... And I've never really believed that or agreed with that personally.

Justin Norman: Okay. Yeah. So all of that money can be redirected...

Eloho Omame: I think a lot of that money, frankly. So I think there's something in, so Y Combinator is an accelerator program and there's something there around sort of investment readiness, dah, dah, dah, dah. So, sure. But this kind of idea that it's critical to kind of, I don't know, I think...

Justin Norman: Maybe it's, the best way to help a female founder is to actually invest in her as opposed to...

Eloho Omame: I think give her the money. I think let her learn in the same way as her male counterparts have the benefit of the doubt and are allowed to make their own mistakes and allowed to fail. Although we can have a whole conversation about how failure is perceived in our ecosystem. But there is a higher tolerance for failure with male founders than there is with female founders. I think at the end of the day, it's venture, so we must also stay in this world in which venture means a relatively high failure rate. I think we also do this thing where we think we can significantly affect the failure rates of female-led ventures because by default they tend to be higher. Maybe someone has the data that supports that. I haven't seen it.

Justin Norman: Yeah. Sticking to this topic of measurement for a second, to play devil's advocate with myself, the degree to which, especially LPs or capital allocators require data to make a data-driven decision... I guess I don't want to discount, even though again it feels like it's an added burden to redirecting more capital, I don't want to discount the role that the outcomes play.

Eloho Omame: Yeah. I'm not sure that the data is necessarily, that's an interesting point, I'm not sure the data is necessarily being used to make investment decisions. My suspicion is the data is being used to track progress more so than it is being used to make investment decisions.

Justin Norman: But with, hopefully with the aim of progress showing that...

Eloho Omame: Oh yes. I think it works more the other way.

Justin Norman: There's a downside...

Eloho Omame: Yeah, yeah. I think it works more in the other direction.

Justin Norman: There needs to be some sort of pioneer to say, We're gonna do this and we're going to gather the data so that we can show progress to everybody else who is maybe not as willing to, whether it's a leap of faith or not, take a leap of faith and have it deploy a hundred plus million dollars into female funds like Mastercard Foundation.

Eloho Omame: Yeah, I hear you but it also comes back to incentives. When you say we're going to show progress, progress and outcomes are not the same thing.

Justin Norman: Right.

Eloho Omame: Right? Progress has value. I'm not sure that that progress is necessarily sustainable without the outcomes. At some point, the two things need to face each other head on. There's also something around the objective of the progress. I want to see the progress. I want to be able to talk about the progress. I want to be able to show the metrics. I want to show the 2% progressing to some number, some number north in direction of 50%. At some point that... Someone's going to say, Well, slow down. But why? Because show me the outcomes. And I think that's a good thing because we want good companies, we want profitable companies, we want strong founders, we want, etcetera, etcetera.

Eloho Omame: Those outcomes are important too. To my mind, it's important that, I'm not saying that's necessarily where the ecosystem is, but it's important that we keep ourselves honest in terms of the reasons for the progress or the reasons why that progress matters. For me personally, I think that progress matters because it should prove a thesis that the outcomes are possible and the outcomes are there. I'm less interested in the progress that allows me to virtue signal. I personally don't have a lot of patients around that. I'm very comfortable if my outcomes will take a little bit longer because I'm quite confident that they will be there. But to this point around virtue signaling, I'm really curious to see what happens with a lot of these in general diversity initiatives, not just in Africa, but globally, and specifically the gender diversity. 'Cause we saw quite a lot of those kind of come to the fore in the last couple of years. I'm really curious to see what happens there when capital is less abundant, etcetera, etcetera, in general.

Justin Norman: Yeah.