What the new CDC-Backed $50m CCA Growth Fund Could Mean for Nigerian SMEs

Avatar
What the new CDC-Backed $50m CCA Growth Fund Could Mean for Nigerian SMEs

The UK government has continued to step up its efforts to promote new businesses in the Nigeria. The UK’s Commonwealth Development Corporation (CDC) Group recently announced a $15 million commitment to Nigerian focused CardinalStone Capital Advisors (CCA) Growth Fund. The new funding is expected to empower CCA to support small and medium enterprises (SMEs) in Nigeria.

As a pioneering investor in African private equity we are delighted to be supporting CardinalStone’s first fund that will bring investment and expertise to the local entrepreneurs and high growth SMEs that are vital to Nigeria’s long-term economic growth and job creation. We have worked with CardinalStone from the beginning, helping them build a team and raise other investment.

The CCA Growth Fund is a new startup fund. However, the CCA itself has been working closely with the UK’s CDC over the last two and half years to support Nigerian businesses across six sectors. These include agriculture, industrials, healthcare, education, financial services and Fast Moving Consumer Goods (FMCG).

Buoyed by the new CDC investment, The CCA Growth Fund has now raised around $50 million in its first round. Plans are in place to further increase the fund to $100 million.

What the New Funds Mean for Nigerian SMEs

As stated earlier, the new CCA Growth Fund targets Nigerian SMEs. In Nigeria however, the definition of SME is quite broad. On the one hand it includes scalable startup (tech and otherwise) operations providing consistent but average numbers. And on the other hand, the term also captures (legitimate) informal business operations operating across several verticals.

However, in this case the CCA Growth Fund is out to empower businesses operating in six verticals. Yet, there’s no explanation as to how it will identify SMEs worthy of funding. Will the fund be an open system where entrepreneurs can request funding? Or will the organisation seek out SME businesses in need of funding by itself?

This is not clear. But according to the CDC website, “a prospective deal might be brought to our attention by a sponsor, third party contact, or through direct outreach.”

So looking through that lense, it’s an open field.

Meanwhile, CCA Growth Fund does pose a few interesting benefits for SME businesses, especially for startups. For instance, judging by the CDC template, the CCA Growth Fund helps portfolio companies develop new sustainable business approaches and standards. The fund also assists SMEs identify risk factors and other performance issues that could impact their businesses.


If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.


Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!


Related Posts

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!