A new fund targeting small and medium-sized enterprises (SMEs) across West and Central Africa is emerging with a differentiated investment strategy. Sabou Capital, founded by Surrayah Ahmed, co-founder of Nigeria’s active angel network Aduna Capital, is set to deploy between $350,000 and $500,000 in up to 25 SMEs. The fund focuses on bridging the financing gap for businesses operating outside the traditional venture capital mold in both Anglophone and Francophone regions.

A Hybrid Model for Growth-Stage African SMEs

Unlike conventional VC firms, Sabou Capital positions itself as a micro-private equity (micro-PE) fund, targeting SMEs ready for scale but underserved by structured financial systems. The fund will prioritize sectors such as agriculture and agroprocessing, renewable energy and climate, logistics, mobility, and supply chain. These are industries where technology enhances operations rather than driving business models, reflecting the fund’s strategy to support practical innovation over high-growth tech startups.

Philosophy Rooted in Rebirth and Renaissance

The name Sabou is a creative take on “Sabo,” a Hausa word meaning rebirth, combined with a French tone, symbolizing the fund’s cross-regional ambitions and mission to catalyze SME revitalization. With a strong presence planned in Nigeria, Senegal, and Côte d’Ivoire, Sabou Capital aims to invest in secondary cities often overlooked by mainstream investors. The decision to focus on such regions stems from Ahmed’s own experience navigating Nigeria’s startup ecosystem outside its primary tech hub of Lagos.

A Founder’s Personal Journey Fuels the Fund’s Mission

Ahmed’s inspiration for Sabou Capital is deeply personal. As a former SME founder in Northern Nigeria, she faced significant hurdles in accessing funding, leading to a premature exit. Her struggles shaped the fund’s inclusive ethos, focused on leveling the playing field for founders who lack the networks and geographic access to capital.

Balancing Returns with Realistic Growth Expectations

Sabou Capital targets a return of 2–3x, aligning more closely with private equity benchmarks than the 10x expectations typical in venture capital. This approach reflects the fund’s appetite for more predictable, sustainable growth rather than chasing unicorns. In doing so, Sabou aims to serve businesses with unmet demand and clear paths to profitability, even if they fall short of traditional VC metrics.

Prioritizing Gender-Lens Investing

A notable feature of Sabou’s strategy is its emphasis on gender-lens investing, with a commitment to backing women entrepreneurs. Ahmed underscores that women receive disproportionately less funding despite data showing higher returns on capital invested in female-led businesses. Sabou Capital intends to close this gap by targeting women founders and equipping them with not only capital but also operational and strategic support.

Strengthening Businesses Beyond Capital

To prepare SMEs for sustainable scale, Sabou Capital offers hands-on technical assistance alongside funding. This support includes corporate governance, financial management, and systems development to make businesses investor-ready. The fund views this as a critical part of reducing investment risk and enhancing long-term impact.

Francophone Expansion and Regional Risk Diversification

Sabou’s cross-regional strategy includes hiring Christian Amouo as General Partner, a private equity expert with a proven track record in Francophone Africa. Amouo previously ran a fund in Cameroon, investing in four companies, three of which continue to operate successfully. His addition complements the fund’s efforts to mitigate exposure to Nigeria’s economic volatility by diversifying into Senegal and Côte d’Ivoire, both of which boast stable, high-growth environments and currency ties to the Euro.

Roadmap and Vision for Expansion

With 20 companies already in its pipeline, Sabou Capital plans to launch formal fundraising in July, aiming to close its first two or three deals shortly after. The long-term vision is to scale the fund’s model across West and Central Africa, ultimately positioning its portfolio companies for acquisition by larger private equity firms or strategic buyers. Ahmed envisions Sabou as a catalyst to transform Africa’s overlooked SMEs into thriving enterprises with regional influence.

Sabou Capital is carving a new path for investing in African SMEs by blending private equity discipline with a VC-informed growth mindset. Through a hybrid strategy, gender inclusivity, and regional diversification, the fund seeks to unlock potential where traditional capital structures have fallen short. In doing so, Sabou offers a fresh blueprint for economic development through entrepreneurship across the continent.

This article is based on original reporting by TechCabal.