Bridging the financing gap in East African innovation.

The 2025 East Africa Private Equity Venture Capital Association (EAVCA) annual conference explored the forces shaping East Africa’s investment landscape, under the theme Balancing risk, return and impact. The event brought together stakeholders to discuss how to navigate regulatory and geopolitical shifts, scale businesses sustainably, and align profit with purpose.

While the conference focused on the broader investment ecosystem, the challenges discussed underscore the importance of catalytic investors like the GIF. Our role is to de-risk innovations, demonstrate commercial viability, and crowd in later-stage institutional capital, such as pension funds and other private investors. We bridge the gap between early-stage risk and institutional capital, showing that African enterprises can be both impactful and investable, an essential factor in unlocking the region’s next phase of growth.

Framing the financing gap as an opportunity

At the summit, the Cabinet Secretary for the Treasury delivered a sobering but pragmatic keynote:
 

“With bilateral and multilateral funding shrinking, public budgets are no longer sufficient.”
 

The urgent need to mobilise new sources of capital was made clear, with local and private capital identified as the two main funding pathways. 

In Kenya, pension funds are growing rapidly, with assets worth over US$15 billion in 2024. Regulations already allow these funds to invest up to 10% in private equity and venture capital, but less than half a percent is currently being allocated this way. This wide gap shows the untapped potential for pension funds and other institutional investors to channel more capital into high-growth businesses, supporting economic development while also diversifying their investments. This gap signals a significant opportunity for pension funds to increase allocations and play a critical role in regional development.

International and domestic private capital is also crucial for bridging the financing gap. Venture capital, private equity, and private debt can support businesses at every stage, from early ideation to growth-stage enterprises in need of long-term, patient capital.

What can GIF do to support innovators?

At GIF, our investment approach is designed to de-risk high-impact innovations, helping to catalyse additional capital and support their pathway to scale. Our risk capital investments do this through:

Equity & Quasi-equity investments: We provide early-stage capital to innovators with high-impact solutions, helping them test and scale business models that might otherwise struggle to attract funding. For instance, in 2019 we invested in Mr. Green Africa, one of the continent’s first circular-economy companies, supporting a scalable plastic recycling model. That investment helped attract additional investors and showed that inclusive recycling can deliver both commercial and social  returns.

Debt investments: For enterprises with proven models, we offer structured loans where traditional financing is absent or inflexible. This approach allows businesses to grow without compromising their mission. To meet this need, we recently launched the Growth Fund, a dedicated investment vehicle providing flexible, scalable capital to enterprises ready to grow.

For non-profits organisations looking to scale through government pathways, GIF can also deploy grants. 

Our investments de-risk innovation and help to demonstrate commercial viability. By showing that African enterprises can be both impactful and attractive investments, GIF helps attract later-stage institutional capital, supporting sustainable growth for communities across Africa.