A Small Enterprise Assistance Funds (SEAF)-managed fund invested USD 6 million in the expansion of Georgia's largest supermarket chain this July.
SEAF’s Caucasus Growth Fund (CGF) made the debt and equity investment in Ioli Gastronomy, the fund’s first investment since closing in March.
Ioli has used the investment to acquire 88% of Populi, Georgia’s leading supermarket chain. The two chains have more than 70 stores in Tbilisi and regions of Georgia, and hope to increase their presence across the rest of the country to a total of 100 stores in the next 2 years.
“This investment has enabled Ioli to purchase Populi, and implement key business synergies positioning Ioli to serve all Georgia ,” CGF fund manager Armands Fomicevs said. “We look forward to seeing our partnership empower Ioli as the company plays an important role in the infrastructure of the region, both in terms of job creation and its support of local suppliers. With this financing from CGF, Ioli will be able to continue its expansion across Georgia, as well as continue to develop its own brand of prepackaged food and condiments.”
A variety of factors have positioned Ioli, which was founded in 2009, for considerable growth. In 2010, the federal government prohibited the sale of goods in informal outdoor markets in Georgia, resulting in a surge in the demand for product sales through supermarket chains like Ioli. At the same time, Georgia’s continuing economic growth has meant that its consumers are increasingly interested in consistent quality grocery products that are accessible and convenient.
CGF’s investment will allow Ioli to capitalize on these factors, as well as provide benefits to the country in its contribution to infrastructure growth, both in increased taxes to the government and a formalization of its supply chain. As Ioli and Populi expand their stores, they will bring increased food quality to regions of Georgia currently undeserved by supermarkets, while stabilizing the agricultural economy for local suppliers and farmers by creating a consistent demand for their products, encouraging them to move beyond subsistence agricultural.