South African Corporate Travel Agency Looks to Embolden Women Under New Investor

25.08.2023 - 14:28 / skift.com / Matthew Parsons

Johannesburg-based Club Travel Corporate is entering a critical next phase after securing the backing of a unique investment fund that will put new emphasis on working with female-owned businesses on the continent.

Alitheia IDF Fund, Africa’s first and largest “gender-lens” investing fund, has taken a majority stake in the agency, which experienced a collapse in bookings during the pandemic. It’s an example of impact investing, a strategy that aims to generate specific beneficial social or environmental effects on top of financial gains.

The private equity fund has now backed a management buyout of the travel agency, which at one point saw transactions plummet from 20,000 bookings a month to just 50 bookings a month during the pandemic. “Our travel is dead,” CEO Kananelo Makhetha told Skift in 2020.

Alithea IDF is itself managed by two women-led firms, Nigeria’s Alitheia Capital and Johannesburg-based IDF Capital.

“There is increasing recognition of the need to level the playing field and ensure that women-led businesses receive the same investment opportunities as their male counterparts,” said Alithea IDF co-founder Polo Leteka in a statement last month, following initial talks that began 18 months ago.

Makhetha, who remains CEO, described the deal as “groundbreaking” for a company of its size as he and five female managers lead the buyout.

“It’s groundbreaking in the sense that they are women, who are women of color as well, and it announces the transformation of the economy of this country as well,” he said.

In 2019 Altheia IDF developed a toolkit called The Case for Gender Lens Investing. “Supporting women led enterprises has been talked about, and even our legislation encourages procurement from women-led businesses, so I think AIF’s tool contributes positively,” Makhetha said.

Club Travel Corporate currently operates in South Africa only, but with the extra cash wants to expand. The fund’s Nigeria presence, for example, will help the agency expand into West Africa, which he described as promising region because it was relatively politically stable.

The situation originally arose after joint shareholder Thebe Investments made its stake available in order to focus on the energy sector. “That created an opportunity for management to come in, to find a financier to assist us,” Makhetha said.

Terms of the deal were not disclosed, but the investment will also boost working capital to help it take on more clients, and go towards developing its NextTC booking tool.

The buyout comes as Club Travel Corporate, part of the Club Travel Group which remains a stakeholder, reports trading has more than recovered to 2019 levels, due to the addition of new clients. But the picture is less buoyant for the sector