Interview with Evelyne Dioh Simpa
MANAGING DIRECTOR, WIC CAPITAL

Lives in: Dakar, Senegal

WIC Capital invests in women-led small and medium-sized enterprises in the West African countries of Senegal and Côte d’Ivoire. Betsy Henderson spoke with Evelyne Dioh Simpa, the managing director of WIC Capital, about investment opportunities in the region.

Highlights from the interview include:

• Opportunities in agri-processing: snack foods, alternative proteins, and more;
• How supplying agricultural equipment and farming support services can be lucrative ventures;
• Why WIC Capital is bullish on the region’s fashion industry; and
• Education investment prospects.

Agri-processing opportunities in snack food, alternative protein, and more

WIC Capital recently invested in Arachides et Cajou du Sénégal (ACASEN), a Dakar-based processor of cashew nuts and other agricultural products. Its offerings include packaged nuts, cashew butter, snack bars, and honey. The company, established in the 1990s by the current CEO Hermione Awouno’s mother, started as a modest venture selling roasted peanuts and cashew nuts. Over time, the business expanded and formalised, and is now managed by the second generation.

The investment from WIC Capital will be used to boost production capacity and expand the team. Dioh hopes that, with its second fund, WIC Capital can make a larger follow-on investment in ACASEN. Currently serving the Senegalese market, she believes ACASEN has the potential to expand to regional and global markets in the future.

Overall, French-speaking West Africa’s agribusiness sector presents robust investment opportunities, according to Dioh. “I really think the agribusiness sector is actually one where Africa still has a lot of value to add, and a lot of value to provide to the world,” she says. While WIC Capital has backed snack food company ACASEN, it is also considering an investment in a beverage company that specialises in natural juices.

Another area of interest for Dioh is plant-based meats and foods derived from insects. She highlights an entrepreneur in Senegal who runs a business that produces plant-based meat alternatives from cashews. “At some point, we need to eat something other than meat,” she remarks. (Read more: West African cashew – the next big thing in plant-based meat?)

There is also significant demand for natural cosmetics – such as hair and skincare items – derived from agricultural commodities, according to Dioh. WIC Capital has invested in L’Arbre de vie Group, a producer of a range of hair and skincare products. What Dioh likes about the company is that it not only has its own brand but also manufactures white-label products for other cosmetics companies. “We have so many local brands with similar products… so positioning themselves as a supplier for these businesses is quite smart,” she explains.

Investing in agricultural support services

Dioh says while investing directly in farming is risky, there are promising opportunities to back companies that supply equipment and offer support services to farmers in Senegal and Côte d’Ivoire.

One critical area is food storage. “Food storage facilities are still a big need and providing them can be very profitable,” she explains. In Senegal, where the agricultural value chain is less developed than in Côte d’Ivoire, many vegetables currently spoil due to inadequate storage.

Distribution and market access services for farmers also present opportunities in both countries, Dioh notes.

Global market for local fashion brands

Fashion is another area where WIC Capital sees investment potential. The firm has backed the designer brand Sarayaa, which was already exporting its products to several international markets at the time of investment. Since then, the company has experienced further growth in revenue.

In a previous interview with How we made it in Africa, a representative from the West Africa Trade & Investment Hub also noted the opportunity to export high-end fashion products manufactured in Senegal to the US under the African Growth and Opportunity Act, which grants duty-free access to the American market for eligible sub-Saharan African nations. (Read more: From canned catfish to high-end fashion – West African products that are in high demand in the United States)

For Dioh there are also business prospects in developing infrastructure for high-quality, large-scale fashion production, as well as in enhancing fashion distribution through both physical and online platforms. “Access to market is still a very big challenge with lots of small [retail] points,” she explains.

Additionally, she is optimistic about the market for professional attire, such as uniforms, due to high demand from schools and businesses.

Education investment prospects: From schools to toys

Education is another sector of interest. WIC Capital is exploring investments in schools, digital learning platforms, companies that produce toys with educational value, and publishing houses specialising in learning materials.

In the area of educational toys, Dioh highlights a brand that creates toys inspired by Senegal’s local history. Additionally, she points to another company, supported by WIC Académie (the firm’s in-house business training unit), that develops toys designed to help children learn mathematics and reading. These toys have the potential to be distributed not only in schools but also directly to families.

Investment playbook for Francophone Africa

For its first fund, WIC Capital invests amounts ranging from $50,000 to $500,000 over an investment period of six to seven years. The firm also takes two board seats in all its portfolio companies and focuses on helping these enterprises develop governance structures.

Dioh explains that WIC Capital operates in regions where the private sector is still nascent. The economies largely consist of small businesses that require technical assistance. For this reason, in 2020, the firm established the WIC Académie, which provides pre-investment training for businesses that have not yet raised capital, and post-investment support for those that have received funding. Although most businesses that complete the pre-investment programme are not yet ready for private equity investment, the Académie has proven to be an effective tool in preparing entrepreneurs for future investments from WIC Capital.

The government is an important partner in terms of identifying companies with investment potential in both Senegal and Côte d’Ivoire, Dioh notes. “If you want to source deals, it’s interesting to talk with the funds that have been set up by the government, or the technical assistance programmes that exist in the different countries.” She explains that entrepreneurs in these countries often turn to government-supported resources first before seeking funding opportunities in the private sector.

While there are many similarities between Senegal and Côte d’Ivoire from an investment perspective, differences also exist. In both countries, SMEs struggle with limited access to capital and technical assistance. However, the banking system in Côte d’Ivoire tends to offer more loans to small businesses, whereas in Senegal, both government and private sector initiatives to support entrepreneurs are more robust.

A significant advantage of investing in Senegal and Côte d’Ivoire is that they share the same currency, the West African CFA franc; are part of the same monetary policy zone; and operate under the same financial arbitration frameworks, Dioh notes.