Unlocking capital for local businesses in Ghana and across Africa through an effective and affordable matchmaking service

Innovative businesses in Ghana struggle to raise financing to scale their operations. There are few opportunities for businesses to meet venture funds, and deal source matching services to connect businesses to funds are inadequate. Many businesses are not investment-ready and lack an understanding of the requirements of funds and how to prepare for the investment process. Moreover, very few funds invest smaller amounts of money ($50,000 – $2 million) that local businesses need, leading to a $5 billion financing gap. Emerging fund managers who are filling this gap often struggle to raise their funds and lack sufficient connections to local and international capital providers.

Impact Investing Ghana (IIGh), with support from the RISA Fund, is addressing this gap by leading collaborative action work with ecosystem players and scaling technology-driven deal sourcing in Ghana through launching and growing the Deal Source Africa (DSA) programme. DSA, piloted in 2022 in partnership with the Impact Investors Foundation Nigeria (IIF) and launched in May 2023 at the West Africa Deal Summit, is a comprehensive programme that connects businesses to investors and transaction advisors. DSA has a digital deal source platform (https://dealsourceafrica.co) which provides investors with a rich database of businesses that meet their investment criteria. The programme provides online tools, deal rooms, and deal trips that connect investment firms and angel investors, individuals, and network members willing to invest in small and growing enterprises as well as established businesses. The platform also facilitates international deal-making and knowledge sharing with local investors and enterprise support organisations.

Businesses successfully connected to one-on-one coaching, pre-deal room support: Businesses participating in the DSA programme receive support before they are connected to investors in deal room sessions, through one-on-one business coaching and pre-deal room transaction advisory services, where transactional advisors support the businesses to prepare to raise funding. In partnership with enterprise associations like the Association of Ghana Industries (AGI), IIGh completed seven investment readiness sessions in Ghana and Nigeria during which 162 businesses (25% female-owned), working in agriculture, financial inclusion, manufacturing, health, and pharmaceuticals, were equipped to engage private funds. This support has strengthened businesses’ understanding of the requirements of funds and how to prepare for the investment process.

Deals closed through the DSA platform: The DSA programme has closed five deals totalling $1,444,071 as of May 2024 with at least $ 1 million worth of deals in the pipeline. IIGh stated how the support given to the enterprises they work with is improving their likelihood of investment: “We noted that investors have started to engage more with businesses in the deal rooms because the businesses come prepared with growth plans that align with investor needs. The pitch decks are better presented, and also answer the key questions investors have, letting the investor know whether the business is a good fit.” Justina Mensah, Programme Lead, Deal Source Africa

Expanded reach and strengthened inter-country partnership between impact investors, businesses, and support services: Establishing and growing the DSA programme and its online platform has successfully contributed to connecting businesses to investors. Support from the RISA Fund has strengthened the inter-country partnership between IIGh and IIF and enabled the programme to expand across Africa. As of May 2024, DSA had held 15 deal rooms with investors, including RISA awardee Katapult. As a result, 33 impact funds investing in Africa have actively engaged 127 businesses (32 female-led; 76 male-led) that are raising funding. These businesses have operations across Africa including in Ghana, Nigeria, South Africa, Mozambique, Tanzania, and Senegal.

Increased traction and positive feedback from investors to engage on the DSA platform: The DSA programme and platform are very important for connecting and matching businesses to investors and funds through a centralised, effective, and affordable approach. Investors are increasingly reaching out to request customised deal rooms because they are seeing value in the programme and the additional support provided to businesses. For example, IIGh received positive feedback from the Ghana Venture Capital Association (GVCA) following bespoke deal rooms organised in 2023 and 2024 as part of the GVCA’s annual summits.

Connecting early-stage businesses to angel investing: IIGh runs the Ghana Angel^[1] Investor Network, which is funded by the Venture Capital Trust Fund. The DSA programme is helping to supply deal opportunities to angel investors in the network. This is significant because impact funds are interested in growth-stage businesses, whereas the angels have an interest in early-stage businesses. The closing of deals by angels would mean that early-stage businesses can receive funding from the DSA programme. This will go a long way to nurture these early-stage businesses to the growth stage for subsequent funding from impact funds.

Improved governance, corporate, and compliance structures of supported businesses: Businesses that have gone through due diligence using the DSA platform, to prepare and qualify for potential matching to investors, are reporting improved internal governance as well as corporate and compliance structures. For instance, Feenix Technology in Ghana, a mobility platform democratising access to vehicle finance in Africa, was successfully linked to an investor after using the DSA platform to prepare compliance and due diligence documents. The company has closed a deal through the DSA programme. A representative from Feenix Technology shared their perspective: “Working with Deal Source Africa was so enlightening because it helped us put into shape some of our corporate governance and compliance [processes] to access the funding, so it shaped us in terms of corporate governance structures. The benefit has not only been accessing the funding, but support in reviewing our compliance and governance structures that has helped us grow our other businesses, and in accessing funding.” Representative, Feenix Technology Ghana

[1] Angel investors are individuals or members of networks willing to invest in small growing enterprises