July 27, 2022

FirstCheck Africa ventures into funding more female-owned businesses

Investment in African female-owned businesses is undoubtedly the next logical step in further empowering the growth of the business sector on the continent. In a continent as diverse and as nuanced as Africa, more women are stepping forward with their own ideas and this creates a lot of room for venture capital aimed directly at female-owned startups. The pre-seed/start-up is the most challenging for any business, and due to the inherent nature of an uneven playing field in the corporate sector and startups, women’s businesses tend to fall to the wayside due to varying factors. The issue is even more difficult for black female entrepreneurs.

 

FirstCheck Africa has taken to understanding these challenges women face in starting their businesses and launched a venture capital fund for women-owned businesses. One of their most recent ventures was a Kenyan-based skincare company known as Uncover.  

 

Interview snippet: Full interview

FirstCheck Africa backed skincare company Uncover. Can you explain why this was an interesting investment opportunity?

One of our portfolio companies is Uncover, a really innovative skincare brand in Kenya who have combined K-beauty (a global skincare category originating in Korea, with products built upon cutting-edge scientific research, innovation and unique ingredients) with traditional African ingredients, formulating innovative and research-backed products specifically for African skin, and for the African market.

They have a digital-first brand building strategy that’s really unique in their space. The company uses social media very effectively – they have successfully created viral moments in order to build their brand’s audience amongst millennial women.

But building a successful direct-to-consumer brand in Kenya is different to building one in, say, the United States. Whilst social media reach is expanding very quickly, many purchases are still done via traditional means; through physical stores such as pharmacies and marketplaces. Uncover has a ‘hybrid rails’ approach, where they use community building and targeted social media strategies to reach customers at the top of the funnel – the ‘discovery phase’ – and then make it as easy as possible to buy either through their website or in physical stores using a network of distributors.

 

Do you think this strategy would also work well in West African markets like Nigeria?

Yes, I believe the same strategy would work in Nigeria. The dynamics of the skincare industry there are similar. Nigeria is a far larger market than Kenya, and lots of cultural trends around the continent are driven by Nigeria. Nigeria is a very trends-driven market and if you can build virality there, there is a good chance that the rest of Africa will follow.

There are a few skincare manufacturing businesses already operating in Nigeria already, but they tend to be small and artisanal, or cosmetics brands that have added skincare as opposed to being skincare-first brands. There are definitely opportunities for more.

 

As the Africa Home & Beauty Cluster, this is excellent news! The businesses in the cluster can benefit from the organization through our workshops and training programs to ensure that an emerging business can apply for venture capital funding. The AB&H Cluster aims to grow this thriving community of beauty and home products passed down from one generation to the next. The platform will grow into a reservoir of resources and knowledge and a tool of empowerment for African brands to craft successful strategies in penetrating a high-potential yet saturated market. With the key players across Sub-Saharan Africa, The AB&H Cluster is well-positioned to propel and empower emerging brands. 

Through these various initiatives, female-owned enterprises will gain an opportunity to grow their businesses to ensure compliance in the country’s which they operate and beyond. Our goal is to bring small businesses closer to becoming more established. If you’re the owner of an emerging beauty or home brand in Africa, we are keen to hear from you!

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