In a significant move that signals a continued, albeit more focused, commitment to African venture capital, the Mastercard Foundation Africa Growth Fund has invested $10 million into an agriculture-focused fund managed by Sahel Capital.

The investment is directed to the Social Enterprise Fund for Agriculture in Africa (SEFAA), a vehicle designed to finance small and medium-sized enterprises (SMEs) that support smallholder farmers across the continent.

This new funding arrives just a month after a different, much larger fund backed by the Mastercard Foundation collapsed dramatically. In July, a South African court ordered the liquidation of the $106.5 million Africa Founders Ventures (AFV), with a judge citing an “abuse of process” and financial mismanagement.

The new deal with the seasoned agribusiness investor Sahel Capital suggests the Foundation is not retreating but rather recalibrating its strategy, doubling down on experienced, sector-specific fund managers.

The New Bet on Farming

The $10 million injection will enable SEFAA to expand its work providing flexible financing to agri-SMEs that are often considered too risky or small for traditional banks. The goal is to strengthen agricultural supply chains and create over 10,000 jobs for women and young people across 13 sub-Saharan African countries.

“This $10 million commitment… is a testament to our team’s hard work and the impactful work we are doing,” said Mezuo Nwuneli, Managing Partner of Sahel Capital. He noted that since its 2021 launch, SEFAA has already provided 33 financing facilities to 18 companies across seven countries.

SEFAA, which was initially anchored by Germany’s KfW Development Bank, typically invests between $300,000 and $2.4 million in early-stage and growth-oriented agribusinesses. The fund provides primarily debt but can also offer equity.

The Mastercard Foundation Africa Growth Fund, a $200 million fund-of-funds, is managed by MEDA, an international economic development organization.

“We are proud to partner with SEFAA and Sahel Capital, whose strategic vision aligns with MEDA’s commitment to advancing economic opportunity through inclusive finance,” said Dorothy Nyambi, President and CEO of MEDA.

A Strategy Under Scrutiny

The investment comes at a critical time for the Mastercard Foundation’s venture capital activities in Africa. The recent collapse of the $106.5 million AFV fund, which had recently rebranded to 54 Collective, sent shockwaves through the ecosystem. That high-profile failure put the Foundation’s due diligence and partner selection processes under a microscope. This new, more modest investment with an established player like Sahel Capital can be seen as a direct response.

Sahel Capital is a private investment firm focused exclusively on the African agribusiness sector. It manages two funds: FAFIN, for Nigerian SMEs, and SEFAA, which has a pan-African remit. This deep specialisation contrasts with the broader, more generalist approach of the now-liquidated AFV.

By channeling capital through a specialist like Sahel and an overseer like MEDA, the Foundation appears to be adding layers of expertise and oversight to its model, aiming to ensure its development capital reaches its intended targets — the continent’s high-potential SMEs. The success of this partnership will be a key test for the Foundation’s fund-of-funds strategy as it seeks to move past its recent troubles.