Information on the target
Phatisa Food Fund 3 (“PFF 3” or “the Fund”) has successfully achieved a first close of US$86 million, backed by a consortium of prominent development finance institutions and impact investors. This initial capital raise marks a significant milestone for the Fund, showcasing robust investor confidence in Phatisa’s strategic approach, proven track record, and established presence across the African continent. The Fund's primary focus is on investing in scalable businesses within Africa’s food value chain, particularly in agri-inputs and downstream activities.
The Fund has already signed legal agreements for its inaugural investment in Zaad Group, a leading independent platform specializing in seeds and crop protection in Africa. This acquisition underscores PFF 3’s commitment to enhancing food security and productivity through critical agricultural inputs, thereby validating its investment strategy aimed at addressing the continent's pressing food challenges.
Industry overview in the target’s specific country
Africa's food sector is undergoing transformative changes driven by significant long-term demand factors. The continent is home to the youngest and fastest-growing population globally, with projections indicating that by 2050, one in four individuals will reside in Africa. Additionally, rapid urbanization is anticipated, with over half of the population expected to live in urban areas by 2035. Despite these demographic advantages, Africa remains heavily reliant on food imports, currently spending approximately US$43 billion annually, a figure projected to escalate to US$110 billion by 2030. This reliance presents substantial growth opportunities for local producers through import substitution.
To meet the increasing food demand, sustained investment is essential to overcome structural challenges, including the limited adoption of yield-enhancing technologies, high levels of food loss and waste, and inefficient supply chains. Phatisa Food Fund 3 aims to address these issues by investing in businesses that enhance productivity, resilience, and affordability within the food value chain, thereby fostering inclusive economic growth across the continent.
The momentum of PFF 3 is bolstered by Phatisa’s established track record in the sector. The previous funds have demonstrated successful exits and returned significant capital to investors, while maintaining a diversified portfolio that includes notable companies across various segments of the food industry. The Fund is committed to a commercially disciplined approach that aligns with impact objectives, particularly focusing on climate resilience and gender equality.
As PFF 3 progresses, it is targeting rolling closes over the next year and is actively engaging with a strong pipeline of prospective investors, aiming for a hard c…