Swedfund, Sweden’s development finance institution, has committed $15 million to Lightrock Africa Growth Fund II, targeting growth-stage businesses seeking to close critical service gaps across underserved African markets.
The investment is expected to support companies using technology to expand access to essential services, including financial solutions, healthcare and sustainable transport, while strengthening local economies and creating jobs.
The commitment comes amid persistent gaps in access to finance, digital services, energy and transport across many African countries. Underserved communities and small and medium-sized enterprises (SMEs) remain particularly affected, limiting their ability to participate in economic activity, expand operations and generate employment.
Through the fund, Swedfund aims to channel capital to businesses with established models and the potential to scale, positioning private enterprise as a vehicle for improving service delivery and supporting more inclusive economic growth.
“Many growing businesses in Africa struggle to access the capital needed to expand services that people and small businesses rely on. This investment will help businesses scale solutions in areas such as finance, healthcare and sustainable transport, contributing to job creation and stronger local economies. We also see potential for further private capital mobilisation,” said Helen Hagos, investment director at Swedfund.
The investment also highlights the role of development finance in addressing funding constraints facing African growth-stage companies, particularly businesses operating in sectors where access to essential services remains inadequate.
By backing companies with proven business models and growth potential, the fund is expected to promote financial inclusion, improve productivity and support the expansion of services that can strengthen the operating environment for households and businesses.
Swedfund said the investment is aligned with its strategy of promoting sustainable and inclusive economic development in underserved markets. It also supports the institution’s priorities around climate action and digitalisation.
The commitment comes as African economies seek to attract more long-term private capital into sectors critical to productivity, resilience and job creation. However, the ability of such investments to deliver broad-based development gains will depend on how effectively portfolio companies scale their operations, reach underserved customers and create sustainable employment.
Swedfund’s expectation of further private capital mobilisation also points to the potential for development finance institutions to use their investments to encourage additional funding into businesses that may face difficulty accessing conventional sources of growth capital.
