Impact investor Investisseurs & Partenaires (I&P) has successfully secured $47.6 million in the first closing of its third flagship fund, I&P Afrique Entrepreneurs 3 (IPAE 3). This new vehicle, which targets a final size of $81.2 million, continues the firm's mission to finance small and medium-sized enterprises (SMEs) across the African continent. The initial closing was strongly supported by a consortium of prominent historical development finance institution partners.
A Strategic Focus on the 'Missing Middle'
IPAE 3 maintains the firm’s established strategy of addressing the "missing middle," a critical segment of African businesses often overlooked by traditional financiers. These SMEs are typically too large for microfinance yet too small to attract major private equity firms, creating a significant funding gap. The fund will provide crucial growth capital by investing in 15 to 20 companies across West Africa and Madagascar.
The fund will deploy minority equity and quasi-equity investments with ticket sizes ranging from $1 million to $5 million. Its investment thesis is sector-agnostic but prioritizes essential industries such as agribusiness, energy, financial services, education, and healthcare. This approach builds on the successful track record of its predecessor funds, IPAE 1 and IPAE 2, which have been active for over a decade.
Backed by Key Development Finance Institutions
The first close was exclusively backed by I&P’s long-standing partners, demonstrating sustained confidence in its investment model and impact generation. The consortium includes the European Investment Bank (EIB), the West African Development Bank (BOAD), Bpifrance, and Proparco through its FISEA initiative. This continued support from major DFIs provides a strong foundation for the fund's deployment and future fundraising efforts.
A key feature of the fund is its innovative de-risking structure, which includes a $8 million junior catalytic tranche from FISEA, supported by the European Commission. This first-loss capital enhances the vehicle's risk profile, aiming to attract a broader range of investors in subsequent closings. Additionally, a $1.3 million technical assistance facility will provide portfolio companies with operational, ESG, and strategic support.
Integrating Ambitious Impact and ESG Goals
IPAE 3 integrates an ambitious impact framework centered on two key priorities: gender equality and climate action. The fund is fully aligned with the 2X Challenge, a global initiative for gender-lens investing, and has set a target of having at least 30% of its portfolio companies led by women entrepreneurs. This commitment places gender empowerment at the core of its investment selection and management process.
On the climate front, the fund has implemented a rigorous strategy that includes systematic due diligence and tailored action plans for all portfolio companies. It aims to achieve a decoupling of at least 15% between revenue growth and carbon emissions, promoting sustainable business practices. This dual focus on social and environmental outcomes positions IPAE 3 as a forward-thinking vehicle in the African impact investing landscape.
The successful first closing of IPAE 3 marks a significant milestone for both I&P and the African SME ecosystem it serves. By combining a proven investment strategy with innovative financial structuring and a robust impact agenda, the fund is well-positioned to foster sustainable growth. As I&P moves toward its final close in 2026, its efforts will continue to empower a new generation of entrepreneurs driving economic development across the continent.