DOB Equity, an East Africa-focused impact investment fund, has announced its first investment under a revised strategy following recent portfolio challenges. The fund is backing Spouts International, an Ugandan company founded in 2014 by Kathy Ku and John Kye. The company produces ceramic water filters under the brand Purifaaya, marking a renewed emphasis for DOB Equity on sustainable solutions in the region and a new leaning toward more sustainable ventures.
The investment in Spouts signals a shift for DOB Equity, which has undergone a strategic review following setbacks with some of its previous investments. These included difficulties faced by logistics startup Sendy and e-commerce platform Copia, highlighting the risks inherent in emerging market investments.
Spouts manufactures water filters using locally sourced materials and advanced ceramic filtration technology. The filters aim to provide a safe, affordable, and environmentally friendly alternative to boiling water, addressing issues such as indoor air pollution from burning firewood or charcoal, deforestation, and high carbon emissions. The company also generates verified carbon credits from the reduction in emissions, creating an additional revenue stream alongside filter sales. Spouts reports distributing nearly 300,000 filters to date, benefiting an estimated two million people and eliminating over 1.5 million tons of carbon emissions.
Karen Serem Waithaka, who took over as CEO of DOB Equity last year, is leading the fund’s new direction. The revised strategy focuses on sustainable food systems, renewable energy, and water and sanitation services. “Spouts marks our first investment under DOB Equity’s new strategy, falling specifically under our ‘Water’ pillar,” Ms. Waithaka said. “With less than 25% of East Africa’s population having access to reliable safe drinking water, the need for solutions like Purifaaya filters is urgent.”
This focused approach contrasts with DOB Equity’s previous broader investment strategy under former Co-CEOs Saskia van der Mast and Hayo Afman, which saw the fund build a diverse portfolio of over 30 companies. While this diversification aimed to foster growth, the challenges experienced by some portfolio companies prompted the strategic reassessment.
Ms. Waithaka, who previously served as Chief Investment Officer at Catalyst Fund, brings a background in finance and a focus on impactful investments. She emphasizes the importance of providing not just capital but also active support to portfolio companies in areas such as governance, strategy, and advisory.
The challenges facing businesses in East Africa, including infrastructure deficits, regulatory hurdles, funding gaps, and limited regional integration, remain significant. DOB Equity’s new strategy aims to address these challenges by investing in companies that offer solutions to infrastructural and climate-related issues. “Our impact thesis continues to be the core driver of our investment strategy,” Ms. Waithaka stated. “We invest in companies that provide solutions enabling communities to become more sustainable and resilient, while simultaneously ensuring the lasting viability of these businesses.”
Daniel Yin, CEO of Spouts, welcomed the investment. “Our team is excited to work together with DOB Equity in Spouts’ next phase of growth and impact,” he said. Last year, the company raised USD3 M from Incofin, a private equity firm which invested through its Water Access Acceleration Fund (W2AF).
The investment in Spouts will enable the company to scale its manufacturing capacity, strengthen distribution networks, and expand its reach across East Africa. The move is a significant step for DOB Equity as it seeks to regain momentum and demonstrate the viability of its refocused investment strategy. The success of this new direction will be closely watched by the impact investing community in the region.