Managers are eager for strategies to keep their portfolio companies afloat, and particularly to protect and provide security to frontline workers. “Many of these fund managers are investing in exactly the solutions that we need right now and the future: health, climate, water and sanitation,” says Catalyst at Large’s Suzanne Biegel, who convenes fund managers, particularly those focused on investments in and for women. As a generation of entrepreneurs worry they will run out of cash, the ecosystem of emerging market capital providers that has financed their growth is scrambling to help them survive. Through no fault of their own, markets have seized up, perhaps for months. The businesses are the kind of cashflow-positive, pro-social ventures that have come to represent an emerging model for global sustainable development. Fund managers describe scenarios in which portfolio companies in mid-fundraise are having term sheets withdrawn or renegotiated. The global economic slowdown and local lockdowns that come with the COVID pandemic has shut down global capital flows from retail to remittances.Įntrepreneurs’ and funds’ own capital-raising efforts have frozen up at the very moment they need cash. Wemy and thousands of otherwise viable, sophisticated and growing businesses around the world are being forced to pivot, pause business lines, furlough or fire workers, and shutter. “It’s definitely a challenging time,” Rhodes says. State border closures preventing Wemy from reaching distributors in northern Nigeria is compounding the disruption. Supply constraints on raw materials from China and Europe have made it hard to restock, even with high demand. Aruwa, a private equity fund manager in Lagos, invested in Wemy last October. “Our supply chain has been disrupted massively,” says Aruwa Capital Management’s Adesuwa Okunbo Rhodes, an investor in Wemy. Yet even companies with essential products and established distribution channels have been caught in the global downdraft of the COVID crisis. Few businesses could have been better aligned to a pandemic-spurred demand spike for essential goods than Wemy. The Nigerian personal hygiene products company sells locally made diapers, feminine products and sanitary wipes, often at a lower cost than imported products. 31 – As the coronavirus spreads in Africa, Wemy’s products have been flying off local shelves, as families stock up on supplies for a two-week, government-imposed lockdown.
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