Juven: Goldman Sachs Spinoff to Invest in African Growth Companies

Juven Launches to Fund Growth-Stage Companies in Africa

A Mauritius and U.K.-based investment firm, Juven, has commenced operations with the intention of providing funding to technology and consumer businesses in Africa that are experiencing a growth phase.

Investment Strategy and Focus

The company, established just one year ago, is seeking to make substantial investments in businesses demonstrating established business models, robust revenue generation, and significant market potential, as stated in a recent announcement.

Juven joins a select group of investment firms concentrating on growth-stage deals within the continent, alongside entities such as TLcom, Novastar, and Partech Africa, all of which have made noteworthy investments in technology companies in recent years.

Distinction from Venture Capital Funds

However, Juven differentiates itself from these firms by operating not as a traditional venture capital fund, but as an evergreen investment company. It originated as a spin-off from the Africa principal team at Goldman Sachs, which had been responsible for numerous successful high-growth investments in the African tech sector since 2014.

Jules Frebault, the founder of Juven, previously led the Africa team within Goldman Sachs’ Special Situations Group. He initially joined Goldman Sachs in 2010 and spearheaded the expansion of the department’s strategy from its London base, focusing on backing companies poised for strong returns on the continent.

Early Investments and Evolution

The team initially engaged in investments spanning both private equity and credit, with prominent investments including businesses centered around telecommunications and infrastructure like IHS Towers.

Subsequently, Goldman Sachs broadened its investment scope to encompass growth-stage technology companies, providing backing to Africa’s first unicorn, Jumia, as well as Zipline, Eat’N’Go, Unicaf (Series B), Jumo (second Series B), Kobo360 (Series A), and Twiga Foods (Series B).

Spin-Off and Dedicated Structure

Frebault explained to TechCrunch that the decision to spin out as Juven was driven by a desire to fully capitalize on the growth-stage opportunities in Africa, with a dedicated organizational structure, allocated capital, necessary resources, and a clear mandate.

Consequently, Goldman Sachs transferred its existing growth portfolio – encompassing Unicaf, Jumo, Kobo360, Twiga, and Eat’N’Go – to Juven. Furthermore, several former Goldman Sachs employees joined Frebault in establishing and developing Juven’s operational capabilities.

Unique Financial Structure

The firm is structured around a holding company and a balance sheet that manages its assets and cash reserves. This allows for the reinvestment of capital when investments are successfully realized, enabling multiple investments without the need for repeated fundraising.

“The firm operates similarly to a corporation in terms of its structure,” Frebault stated. “Capital deployment is sourced either from our balance sheet or through follow-on investments from our shareholders.”

Current Investment Activity

This year, Juven has already reinvested in four companies within its existing portfolio. While the firm intends to add further investments before the end of the year, Frebault anticipates making no more than three new investments annually.

Investment Size and Stage

The typical investment size will range from $10 million to $30 million, with the potential for follow-on investments reaching $50 million or more. For technology companies, a primary target for Juven, the firm focuses on Series B and subsequent growth rounds.

Value-Added Support

Given the limited number of investments made each year, Juven is committed to providing additional support to its portfolio companies, encompassing financial, legal, operational, and strategic guidance.

“We must maintain flexibility, starting with investments as small as $10 million, as this can be appropriate for Series B rounds on the continent,” Frebault noted. “Our approach differs from traditional venture capital, and we do not pursue a high volume of investments. We concentrate on select opportunities and maintain ongoing investment in those companies.”

Focus Areas and Problem Solving

Juven prioritizes entrepreneurs who are utilizing technology to address challenges related to access for a broad population base, according to the company. Frebault added that the firm will also consider non-tech companies that effectively tackle similar issues.

While open to a wide range of investment opportunities, businesses focused on solving problems in areas such as food, education, healthcare, financial services, commerce, and logistics are likely to be given precedence.

Investment Restrictions and Geographic Preferences

“We are open to investing in a diverse range of sectors, but we are deliberately avoiding extractive industries,” the founder clarified.

Similarly, the firm demonstrates a preference for businesses expanding their reach regionally within large consumer economies, including Nigeria, Kenya, Egypt, South Africa, Ghana, and the Ivory Coast.

Relationship with Goldman Sachs

Despite the transition of the investment team to Juven, Frebault emphasized that Goldman Sachs’ Asset Management division retains a global mandate that includes Africa, although with a focus on larger-scale and institutional activities.

Goldman Sachs declined to provide commentary regarding Frebault’s departure, Juven’s activities, its own strategic objectives, or future plans for the region.