Information on the Target

The Laiterie du Berger (LDB), founded in 2005 by Bagoré Bathily, a Franco-Senegalese veterinarian, has swiftly risen to become Senegal's second-largest dairy supplier. With a focus on using local milk, LDB was established with the aim of ensuring that the Peul farmers can thrive from their livestock amidst a backdrop where 90% of the country's milk is imported. By 2023, LDB had achieved a remarkable annual revenue growth of 23 times since the entry of Phitrust Partenaires into its capital, currently holding nearly 10% of Senegal's fresh dairy market and serving over 5,500 farmer families.

Industry Overview in Senegal

Despite 30% of Senegal's population relying on livestock farming—approximately 4 million people—the country's dairy sector heavily relies on imports, with local production struggling to meet domestic demand. This situation presents a significant opportunity for growth within the dairy industry, particularly for entities that can innovate and incorporate local resources.

The establishment of LDB was a strategic response to promote local production and improve the livelihoods of livestock farmers. It has effectively mobilized investment to enhance dairy production capabilities, driven by the demand for locally-sourced dairy products.

With the agricultural sector playing a critical role in Senegal's economy, focusing on dairy is a strategic move not only to uplift local farmers but also to create jobs and stimulate economic activity in rural areas. As of 2023, LDB is leading the market in fresh dairy products, setting a precedent for future investments in the sector.

This growth trajectory has the potential to transform the landscape of Senegal's dairy market, making it less dependent on imports and more self-sufficient through sustainable practices and local partnerships.

The Rationale Behind the Deal

The decision of Phitrust Partenaires to exit its investment comes after a decade of significant contributions to LDB's growth journey. As the company has reached a mature level and secured confidence from institutional investors, the founders and ongoing stakeholders are now better positioned to continue leading the enterprise independently.

The exit strategy aligns with Phitrust’s goal of enabling social enterprises to thrive autonomously, demonstrating their commitment to social value alongside financial returns. It also allows Phitrust to redeploy capital to other impactful ventures while showcasing the success of their patient capital model.

Information about the Investor

Phitrust Partenaires, founded in 2006, is a pioneering venture capital firm based in France that focuses on patient capital investment in social enterprises. Over the years, it has established a strong portfolio, including more than 30 innovative companies committed to social and environmental impact.

With a strategic focus on enhancing ESG practices within publicly traded companies, Phitrust combines financial investment with an engaged network of professionals to support the growth and scale of social initiatives. Their partnership with LDB is a clear indication of their commitment to supporting organizations that intertwine economic viability with social responsibility.

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The strategic exit by Phitrust from LDB highlights the efficacy of patient capital in nurturing socially-driven enterprises. The significant growth experienced by LDB, both in revenue and market share, suggests that this was indeed a sound investment for Phitrust, yielding substantial social and economic impacts within Senegal’s dairy industry.

Phitrust’s backing has granted LDB the necessary tools and networks to establish a sustainable business model. Their growth trajectory demonstrates the successful alignment between impact investing and profitability, essential for attracting future investments in a highly competitive market.

Furthermore, with ongoing ambitions for expansion and market penetration, LDB shows promise for continued success and impact even post-exit, indicating a strong future for the Senegalese dairy sector. Engaging with local farmers and emphasizing local product usage positions LDB favorably against imports.

Overall, the transaction encapsulates a win-win situation: Phitrust has empowered LDB to flourish independently while also reinforcing the narrative that social impact can effectively coexist with financial success.

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