The Ascent Rift Valley Fund (ARVF), managed by Ascent Capital Africa, has made its inaugural investment in Medpharm Holdings Africa, a leading medical diagnostic laboratory with operations in Ethiopia and expansion ambitions in the Greater East Africa region.

Medpharm, which is Africa’s only Joint Commission accredited referral laboratory, started operations in 2004 and has grown to become Ethiopia’s leading medical diagnostics laboratory.

The growth of the medical sector in Africa’s second most populous country has been made possible, in part, due to the increased availability of evidence-based medical diagnostics services.

This has been significantly aided by Medpharm’s countrywide presence.

Guy Brennan, partner at Ascent, explained that the investment of $2.5m will be used to create Ethiopia’s first world-class, private sector, pathology department and increase the range of tests available.

“This department will be a game changer in the area of cancer diagnosis in Ethiopia and beyond. Another area of expansion for Medpharm will be into “Wellness testing” which will allow clients to identify areas of concern early through annual health reviews and hence reduce the burden on the Government’s health budgets.”

Ascent is the first regional private equity fund with advisory offices in Addis Ababa, Nairobi and Kampala.

Ascent Partner David Owino said that this investment was made possible as a result of their Ethiopian presence.

“The Addis Ababa advisory office allows us to be much closer to the Ethiopian entrepreneurs with a vantage point to identify attractive investment partners and to work with them to grow their enterprises in Ethiopia and the greater East African region,” he said.

Ascent announced in July 2014 the first close of the Ascent Rift Valley Fund.

The fund has commitments of $50m to be invested in growth enterprises in Ethiopia, Kenya and Uganda.

The fund’s investment size is between $2million and $10m per company.

The Fund’s investors include Norfund, OeEB (Government of Austria), European private investors and regional African pension funds.