Deal Summary
AfricInvest ($2.5m) and Proparco (€450,000) have approved a $2.99 million debt financing for Lapaire Glasses SA. This optical retail chain provides free eye tests and affordable eyewear across Francophone West Africa and East Africa using a network of 80+ shops. This financing aims to enhance Lapaire's operational capabilities across Côte d'Ivoire, Benin, Togo, Mali, Burkina Faso, and Uganda and expand its market presence to Senegal, the D.R. of Congo and Tanzania. The deal is one of 3 early commitments from the Transform Health Fund, a blended-finance debt fund closed by AfricInvest and The Health Finance Coalition, of which Proparco is also a Limited Partner.
Terms:
- Fund Managers: AfricInvest and Proparco
- Funds: Transform Health Fund (AfricInvest) and The Bridge Fund by Digital Africa (Proparco)
- Target Company: Lapaire Glasses SA
- Deal Type: Debt
- Investment Amount: $2.99m
Deal Rationale
Commercial funding has fallen short in addressing the financing needs of Africa’s healthcare sector. Despite Africa accounting for approximately 16% of the worldwide population and shouldering around 23% of the global disease burden, only about 1% of global health spending is allocated to the continent.
The deal, one of the first from the Transform Health Fund, highlights the role of blended finance in providing new models for commercial investors to invest in returns and impact. Transform Health Fund is structured with a blended capital stack, which means that it has two investment layers: a 35% layer for catalytic shareholders like donors, philanthropists and foundations who are able and willing to take on more risk and wait longer for returns, and a 65% commercial layer for return-seeking investors such as DFIs and corporates that require risk-adjusted rates of return. This model is intended to attract private capital to augment existing donor funding activity, effectively expanding the overall pool of financial resources available for healthcare.
- Market opportunity: Lapaire targets a significant, underserved market in Africa where millions have visual impairment but lack access to affordable eye care. The African eyewear market is projected to grow at a Compound Annual Growth Rate (CAGR) of 8.5% from 2024 to 2030, driven by increasing awareness of eye health and rising disposable incomes. The company’s customers, who earn between $200 and $800 per month, often lack health insurance, making the upfront cost of eyewear prohibitive. By offering glasses at around $25 and implementing a flexible payment plan—30% upfront and 70% on delivery—Lapaire makes eye care more accessible to price-sensitive customers.
- Risk/return Analysis: As a company competing with essential services for its customers’ limited income, economic downturns or changes in consumer spending habits could impact demand. Its reliance on a customer base with limited financial flexibility and limited health insurance presents some risks. However, if Lapaire successfully executes its growth plan—aiming to open 300 new eye care centres by 2026—it could drive both strong social impact and financial returns, offering a diversified exit strategy for investors as it scales across multiple regions. While not profitable in 2023, Lapaire is expected to demonstrate that healthcare businesses can be sustainable while providing high-quality and affordable healthcare.
About the Fund Managers
Founded in 1994 in Tunisia, AfricInvest is one of Africa’s most experienced private capital platforms across venture capital, private equity, blended finance, and listed equities. It has raised over $2 billion dollars across 21 funds to invest in financial services, agribusiness, consumer/retail, education and healthcare. The Transform Health Fund is a $111m, high-impact healthcare infrastructure fund in partnership with The Health Finance Coalition, that intends to invest debt and mezzanine capital to scale proven healthcare innovations across Sub-Saharan Africa and North Africa. Transform Health Fund targets three critical areas: supply chain transformation, innovative care delivery, and digital innovation.
Proparco is a development finance institution and the private sector financing arm of the French Development Agency (AFD). Proparco deploys the Bridge Fund by Digital Africa, which was intended to be an appropriate response to the COVID-19 pandemic and provide bridging loans to young, innovative African companies affected by the economic crisis and contraction of the investment market.
