From fintech to insect protein
Pauline Koelbl, founder and managing partner of ShEquity
ShEquity is an early stage investment company supporting African female entrepreneurs. We speak to founder and managing partner Pauline Koelbl about the firm’s investments and business opportunities in sectors ranging from fintech and agribusiness to healthcare.
ShEquity recently backed Nigerian digital banking startup Owoafara. What was the motivation for this investment?
Owoafara’s mission is to unlock financial access for Africa’s underserved populations by creating platforms that partners use to offer savings, loans and transactions to help them grow and earn a better livelihood. Specifically, Owoafara aims to provide a financial inclusion solution for the 65% of people in sub-Saharan Africa who live in low-income communities and lack access to basic financial services. Many informal traders in these communities run profitable but more cash-based businesses, with over 90% of the $2 trillion generated by SMEs conducted through cash or offline payments.
In the face of competition from other digital banking and lending platforms, why does ShEquity believe Owoafara will find success in the Nigerian market?
We know that about 58% of the population in Nigeria lack access to appropriate banking and financial services and the majority of them are women. The first reason we believe Owoafara will succeed is the team’s track record, which demonstrates the ability to respond to customer needs and sustain growth. Although Owoafara had not yet received institutional investment at the time of our investment, it had completed US$1.1 million in transactions.
Second, the team is locally rooted and understands well the needs of the larger segment of its customers, women. Approximately 80% of Owoafara’s current loan book is made up of women.
Third, statistics have been proven to show that most credit scoring models have unconscious biases that do not favor women. As a female-founded and led company, Owoafara’s algorithms are designed to avoid the same biases and give women a better chance of getting credit. Nigeria is a massive market and women are the most underserved.
At the end of the day, success depends on how Owoafara will continue to captivate its target customers, and the team’s strategies seem to be working well. Owoafara’s strategy leans heavily on closing the gap, especially for women in the informal sector.
What other areas of the fintech industry do you think offer untapped opportunities for startups to tap into?
The untapped opportunities are related to the last mile distribution of financial services such as health insurance, pensions and money transfers, especially P2P transfers. As for the transfers, most of them cut the last mile because they don’t have access to internet enabled phones.
Another of ShEquity’s investees is Ecodudu, a company that uses the black soldier fly to produce bio-fertilizer and insect protein for animal and fish feed manufacturers. What prompted this investment?
The type of business, the talented team and the sustainable solutions they bring to the market. A circular economy company, Ecodudu aims to feed the future with insect protein. In doing so, they address two issues: access to natural proteins and waste management. In addition to providing natural protein, they also produce organic fertilizer at the same time.
Ecodudu’s business model involves working with small-scale farmers and training them to also be part of the value chain for insect protein production and waste management. The impact of Ecodudu on the environment is unprecedented since insect proteins are the best option for feed producers who usually use fishmeal. This has great potential to solve the problem of overfishing. Also, Ecodudu is a great example of a business that focuses on doing good while being good, and this is completely in line with ShEquity’s business philosophy.
Can you provide an overview of ShEquity’s investments in the healthcare sector, and the challenges that these start-ups address?
We have invested in two healthcare companies, Medsaf and Wazima Health.
Medsaf focuses on providing affordable quality medicines to developing countries and currently operates in Nigeria. When it was launched, Medsaf’s primary aim was to address the problem of counterfeit medicines. While solving this problem, the team realized that there was a need to support the entire healthcare value chain in Nigeria with quality and affordable medicines. Medsaf now bills itself as a “one-stop shop for hospitals, clinics and diagnostic centers to purchase, manage and track their critical medication needs with technology”.
Wazima Health offers an integrated telehealth platform for healthcare professionals. It provides integrated end-to-end smart diagnostics and telemedicine software for patient and health management as a service (SaaS) for non-communicable diseases, including point-of-care screening, access to rapid diagnosis, follow-up, referral, monitoring and continuous care support. Wazima currently operates in Nigeria, Ghana and Mozambique.
Wazima addresses the following challenges:
- Non-communicable diseases will be the leading cause of death in sub-Saharan Africa by 2030: Conditions such as hypertension, diabetes, cancer, respiratory disease and kidney disease affect an estimated 270 million people in sub-Saharan Africa.
- Inadequate and unavailable continuous management: 60% of sub-Saharan Africans affected by non-communicable diseases are either undiagnosed or poorly managed. Lack of follow-up, clear communication and health contact leads to a poor prognosis and a high death rate.
- Poor access to medical and supportive communities: Most sub-Saharan Africans have limited or no access to quality support in their health journey. The majority have no health records. They struggle to pay for healthcare, which is mainly paid out of pocket.
