Scalable Enterprises

Growing sustainable scalable enterprises drives industrialisation, economic growth and job creation.

Results in 2021

1,408

MNOK

Committed through direct investments and funds

6,700

new jobs

Created in direct investments and investee companies within funds portfolio

682

MNOK

Increase in revenue (32% increase)

Strategic ambitions

Norfund’s impact objective for this business area is to foster growth in portfolio companies, both in the form of increased employment and increased revenues.

Norfund has defined the following ambitions for the strategy period 2019-2022:

Create 50,000 jobs through direct investments and funds, whereof 3,000 jobs created in direct investments
2 billion NOK revenue increase in direct investments

Accumulated achievements 2019 – 2021

Investments and Results in 2021

Scalable enterprises account for 28% of Norfund portfolio. By the end of 2021, the portfolio included 28 direct investments and 62 fund investments.

1,408

MNOK

Committed in 2021

7,754

MNOK

Committed in total SE portfolio

Impact 2021

6,700 jobs created

In 2021, the number of jobs in Scalable Enterprises’ direct investments increased by 2,400. When including the investee companies within our funds portfolio, the total number of new jobs created was 6700.

The total number of direct jobs in the Scalable Enterprises portfolio (incl. funds) was over 200,000.

32% revenue increase

In 2021, revenues in Scalable Enterprise’s direct investments increased by 682 million NOK (32%). This is a substantial improvement from 2020, when revenues decreased by 18%, largely due to the COVID-19 pandemic.

Investments per region

Sub-Saharan Africa is the priority region of direct investments in agribusiness and manufacturing. Norfund's staff in South Africa, Kenya and Ghana played key roles in identifying and monitoring our direct investments.

Investments in 2021

Total Scalable Enterprise portfolio

Highlights of 2021

New investee companies

New fund investments

Follow-on investments

Marginpar

Norfund initially invested in Marginpar in 2018. The company is a successful import agent and flower producer operating in East Africa, and Norfund invested after seeing the close alignment of our geographic and sectoral priorities with the company which covers the value chain from breeding of flowers to distribution. There were risks, but Norfund saw long-term growth opportunities and from the start was an active owner.

In 2020 though the pandemic hit, and Marginpar lost all business overnight. The Amsterdam flower market collapsed and air freight out of Africa was simultaneously affected, so flowers could neither be sold nor exported.

With 3,000 employees and no one to buy its flowers, Marginpar was in a crisis. The management of Marginpar and Norfund as investor faced an exceptionally difficult situation. Instead of implementing layoffs, all employees voluntarily took a 50% pay cut and Norfund stepped in with an emergency loan to keep people employed and the company going. Six months later, the flower demand picked up and people came back to work with 100% pay and compensation for the 50% pay reduction that they had contributed with.

Since then, Marginpar has recuperated and delivered record figures for the year ending June 2021. Stories like Agnes (see video below) illustrate the value of long-term relationships and active ownership with our investees, even during challenging events like the pandemic.

Phatisa Food Fund 2

In the beginning of 2021 Norfund, together with CDC Group (now BII), Finnfund, FinDev Canada and BIO, announced an 82 million USD joint commitment to Phatisa Food Fund 2, managed by Phatisa. PFF 2 will invest across the African food value chain, considering investments in mechanisation, inputs, poultry and meat production, food processing and manufacturing, logistics, aggregation and distribution across Sub-Saharan Africa.

Norfund committed 20 million USD to the investment that aims to strengthen and increase food supply, local production and distribution across the region.

The fund, via its investment in companies in the food value chain, targets over 90,000 small-holder farmers and micro-entrepreneurs and aims to create over 2,000 permanent jobs and sustain another 10,000 jobs. The investment follows the success of Phatisa’s African Agriculture Fund (AAF), which has created more than 1,800 jobs and benefitted 86,000 farmers operating in over 20 markets across the continent.

Building on AAF, Phatisa Food Fund 2 will enable small-holder farmers and micro-entrepreneurs to develop their skills, broadening access to markets and economic opportunities. The new fund will also address access to, and affordability of products among farmers and promote smart agricultural methods – enhancing crop resilience, reducing food loss and waste by 50% in the companies it finances, while increasing outputs, yields and incomes.