In a venture landscape often defined by blitzscaling and unicorn hunting, an impact investor is proving the power of a different model in Africa’s toughest markets: building the investors first. A new report from I&P Développement (IPDEV), the fund-of-funds arm of Investisseurs & Partenaires (I&P), reveals a strategy that multiplies every euro it invests by nearly eleven times, creating a powerful leverage effect for local startups.

The headline figure from the report, seen by Sifted, is a 10.8x leverage effect: for every €1 IPDEV commits, a total of €10.80 is ultimately mobilised for African small and medium-sized enterprises (SMEs). This isn’t achieved through complex financial derivatives, but through a patient, two-stage process of building local investment ecosystems from the ground up.

The Two-Stage Leverage Engine

The model’s success hinges on a deliberate strategy to attract local capital and de-risk investments at every step.

1. Fund-Level Leverage (Creating the Managers): IPDEV’s primary mission is to sponsor and launch first-time fund managers in countries often overlooked by international capital. Its initial capital acts as a catalyst. For every €1 invested by IPDEV, it raises an additional €2.45 from other investors to create a partner fund. Crucially, 94% of these co-investors are African institutions — banks, insurance companies, and pension funds — convinced to back their local markets.
2. SME-Level Leverage (De-risking the Deals): Once operational, these local funds invest in SMEs. Their presence and due diligence act as a stamp of approval for other financiers. For every €1 a partner fund invests in an SME, the company successfully raises an additional €2.10 from sources like commercial banks.

This multiplier effect is the core of the strategy. IPDEV is now looking to raise a new fund of €25m in equity and €10m in grants to expand its network from its current nine partner funds (seven operational, two in launch) to between 13 and 15.

An Average of Ticket €250,000 

The impact of this capital extends beyond simple growth metrics. The active portfolio of 52 SMEs, funded with an average ticket of €250,000, is concentrated in fundamental sectors like agribusiness (33%), education (19%), and health (12%).

A key focus is creating stable, formal employment in regions dominated by the informal economy.

• Job Creation: The portfolio supported 1,802 permanent jobs in 2024, an increase from 1,657 in 2023.
• Formalization: 86% of these employees are covered by social security. While this is a slight dip from 91% in 2023 (attributed to new, less structured companies joining the portfolio), it remains a significant achievement.
• Wages: The average wage is 55% higher than the legal minimum in the respective countries.

The report also highlights the wider economic contribution, with portfolio companies paying €2.8 million in local taxes in 2024 and supporting over 1,700 local suppliers.

The High-Touch, High-Effort Reality

This model is the antithesis of lean, remote investing. I&P’s 80-person team across eight African offices provides intensive, hands-on support to the 119 investment professionals in its partner funds. This includes everything from ESG training to operational guidance and network animation.

This high-touch approach extends to building a pipeline of future investments. I&P and its partners have raised over €34 million for dedicated acceleration and seed programs that prepare early-stage ventures for equity funding. In 2024 alone, 131 SMEs received seed financing. These programs, like the €10.4m CATAL1.5°T initiative for climate tech and the €4m I&P FARM program for agriculture, are designed to bridge the “investment readiness” gap.

While effective, this method is operationally heavy and prioritizes depth over breadth. The focus remains on SMEs serving local and regional markets (83% of the portfolio), rather than export-driven, high-growth tech startups.

A Different Bet on African Growth

The IPDEV report outlines a model that is less about finding the next unicorn and more about building the stable that breeds them. It is a long-term, high-effort bet on the idea that sustainable investment ecosystems must be built from within, using local capital and local talent. For a venture community searching for scalable impact, IPDEV’s painstaking, ground-up approach offers a compelling, if complex, blueprint.