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Impact Investing

Argentil, CDC Group support Tempohousing, mPharma’s impact investing moves

The number of infected Nigerians is rising daily, notwithstanding, this development is not discouraging impact investors from doing what they know how tod do best, which is to make investing moves that guaranty returns and socially sustainable. That is the case of Argentil Capital Partners and CDC Group both of which in the first two weeks of June 2020, supported the ambitions of Tempohousing Nigeria Limited and mPharma.

Argentil Capital Partners has provided additional debt and equity to Tempohousing Nigeria Limited (THN). THN is a specialist in the development of flexible and affordable residential and commercial spaces with the aid of modern prefabricated technology and cargotecture. Its products have disrupted traditional market segments in places where high building and land costs in urban areas have created difficulty for individuals and firms to access quality living and commercial workspaces.

According to the African Private Equity and Venture Capital Association (AVCA), THN is a fast-growing SME with revenue growth of over 53 percent CAGR from inception in 2012 to 2019. Tempohousing Nigeria was incorporated to meet the demand for affordable housing in Nigeria by leveraging on technology and expertise to create a Nigerian tailored solution to the housing problem. The housing units should be quick to build, easy to maintain, portable and most importantly affordable.

The disruptive impact of THN’s solutions was acknowledged when Àrgentil received Private Equity Africa’s Deal of the Year (Small Cap) 2019 for the THN investment. Àrgentil is currently fundraising for a new regional fund that will target investment opportunities in SMEs across a number of key growth sectors in West Africa with an immediate focus on Ghana, Liberia, Nigeria, and Sierra Leone.

Based on AVCA’s report, Àrgentil first invested in 2018 via the Àrgentil Principal Investment Portfolio II (APIP II) which invests equity and debt in SMEs operating in Nigeria.

The financing Argentil Capital Partners provided to THN was to support its partners and clients to develop projects where its cargotecture and prefabricated technology will deliver spaces quicker and cheaper in education, healthcare, financing services, SME, as well as other sectors. THN’s projects are 30 percent cheaper when compared with the traditional building cost and three times faster to build.

The debt provided would support working capital to support the execution of on-going projects such as renewable energy training centres in universities and healthcare projects for covid 19 interventions across Nigeria. In addition, loans given by Argentil was converted into shares and thus increased Argentil’s position in the THN.

Elsewhere, CDC Group is co-investing in mPharma under the venture scale-up programme. The CDC Group is a UK’s publicly owned impact investor. It closed a co-investment in mPharma which is a tech-enable healthcare company driving supply chain efficiencies for pharmaceutical products across Africa. CDC has made the investment in mPharma alongside Novastar Ventures, a CDC-backed venture capital fund manager, which led the company’s Series C funding round.

Three features make the CDC Group’s investment in mPharma unique. First is that the deal is one of the first investments under the CDC Group’s venture Scale-up Programme. Second, mPharma aims to dramatically reduce the cost of essential medicines in Africa, that will boost the affordability and accessibility of quality healthcare to all consumers in Africa. Third, mPharma has provided 700,000 testing kits and 120 PCR medical equipment to medical laboratories in eight African countries.

mPharma Health Nigeria Limited envisions an Africa that is in good health, and is resolved to ensure that an average person on the continent has access to safe and affordable medication. The firm’s resolve to have an African continent that is in good health was motivated by some scary medical statistics in Africa. For instance, half of the global deaths in under 5 occur in Africa. Life expectancy in Africa is lower that some few decades ago, while over 100 Africans die every hour from water-borne diseases. According to the World Health Organisation (WHO), contaminated water can transmit diseases such diarrhoea, cholera, dysentery, typhoid and polio.

Therefore, no genuine African healthcare providers will be comfortable with these medical statistics, and thus explains the roles being played here by mPharma which partners community pharmacies, adopting technology and data to aggregate demands and based on that create efficient supply chains within the vast and fragmented pharmaceutical market in Africa.

Based on the above strategy, mPharma is able to distribute quality pharmaceutical products at a significantly lower cost that competitors. Thus far, mPharma has procured and distributed 700,000 testing kits and 120 PCR medical equipment to medical labs in 8 countries in Africa.

“I am delighted to announce our co-investment in mPharma, alongside Novastar Ventures, a key partner for CDC, to support the company in developing a more efficient supply chain for pharmaceutical products across Africa”, said Stephen Priestley, Managing Director, Funds and Capital Partnerships, CDC Group.

The Venture Scale-up programme aims to invest in early stage companies that adopts technology and innovative business models with a view to achieving transformational impact. The new investment that came from the CDC Group will help mPharma expand its retail network by an additional 500 pharmacies, minimise the counterfeit medication as well as reduce the cost of essential medicines to end users over the next few years.

“We look forward to working with CDC Group due to its deep roots in Africa, extensive government contacts and expertise in environmental, social and governance practices”, said Gregory Rockson, co-founder and CEO of mPharma.

 

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