Meet Adesuwa Okunbo Rhodes, One Of A Handful Of Women Leading VC Firms In Africa
Adesuwa Okunbo Rhodes is the Managing Partner and Founder of Aruwa Capital Management and one of a handful of women leading VC firms in Africa. Aruwa invests between $500,000 and $2.5 million in post-seed stage startups.
Beyond being able to invest in an underrepresented market, existing data suggests that gender diversity improves companies’ profitability, and Rhodes was keen to exploit this.
“I’ve been in the industry for 14 years. I was running a fund prior to launching Aruwa, and when I was fundraising for that fund, I looked around and saw that there were no women running or owning their own funds. Back then, there were less than ten funds that were owned and run by a woman, and this is a continent of 1.3 billion people,” she told Techpoint.
“That just didn’t seem very right to me when women make up 50% of the population and Africa has the highest rate of female entrepreneurship in the world. So I really saw that gap in the market, and I saw it as an arbitrage opportunity where if you’re able to invest in a sector where there is little competition, you’re able to cherry-pick the best investments that can yield enhanced returns.”
How did she get into this?
Born in Lagos, Rhodes moved to the UK to continue schooling in her teens and then went on to graduate from the University of Bristol in England.
Her investment career started at Lehman Brothers in June 2008, but that journey was cut short by the 2008 financial crisis that took place four months later, which led to the eventual collapse of the 158-year-old Lehman Brothers.
After Lehman Brothers, she started a 4-month internship at JP Morgan. When the internship ended, she went to TLG Capital for a short period and then went back to JP Morgan for a full-time job where she worked on acquisitions and leveraged finance deals worth about $5.6 billion for almost 4 years.
Her desire to invest in Africa was sparked in 2011 during her 5 months at TLG Capital, a private equity firm that invests across Africa. Rhodes worked at TLG Capital briefly after her initial four months internship with JP Morgan and before being retained for a full-time position.
What factors do you consider when selecting a business to invest in?
When previously asked by ‘Thisdaylive’ what she looks for when investing in companies, she said: “We focus on investing in established, rapidly growing companies within the small to lower mid-market that operate in high-growth industries that have already proven their business model.
“Our focus on the early-growth segment is intentional because that segment is currently overlooked and underserved as most of the commercial credit and private equity funds target much larger businesses. There are numerous small to midsize businesses in Nigeria that are growing rapidly and have an operating track record of profitability of at least three years but just lack that incremental capital to scale up.
“Most small to mid-sized companies in Nigeria and across West Africa have limited access to longer-term debt and/or private equity capital to finance their business plans and sustain growth due to the current composition of the industry.”
