RENEW believes Ethiopia and other developing economies are rife with opportunity for investment. Early adopters on both small and large scales agree – and have already acted on these beliefs by investing in these budding economies. RENEW and the Impact Angel Network just made their fourth investment since opening RENEW’s Ethiopia office in 2013, and are set to close another investment soon.
Despite this upward trajectory of investing in developing economies, many investors are still squeamish when they hear ‘Africa’ and ‘investment’ in the same sentence. While investing in frontier markets can be a challenging endeavor, with potential risks of inflation, currency depreciation, political instability, natural disasters and other uncertainties associated with developing countries, the social impact and opportunities to create financial returns are great.
So how can impact investment advisory firms help Western investors to see Africa as a land of opportunity and to become comfortable with investing in frontier markets?
RENEW strives to provide the members of the Impact Angel Network an unforgettable investment experience. In order to achieve this goal and address the very real challenges that investing in developing countries bring, RENEW's team provides full on-the-ground support to investors looking to invest in frontier markets, but who typically do not have the local presence to source, conduct due diligence and monitor their investments on their own. The majority of RENEW’s team works in our Addis Ababa office in Ethiopia, full-time, to maintain a presence on-the-ground. We believe this component is crucial to the success of investments in frontier economies.
RENEW tailors the investment experience to our members' specific needs. Investors are encouraged to travel to Ethiopia and participate in an Econ-Tourism trip, during which they can meet with entrepreneurs, tour their facilities and see the current state of the businesses first-hand. This experience provides investors with the chance to gain a better understanding of the economic and investment environment in Ethiopia. This in turn allows our members to invest with confidence, knowing that RENEW is selecting high-growth potential companies, properly vetting the entrepreneurs and managing all investments post-closing.
Investors are usually surprised to see so much development, growth and opportunity in Ethiopia. They notice signs of a rising middle class and are encouraged by the wonderful people they meet who want to work and build their country into an economic powerhouse. Our investors see first-hand the desires of Ethiopians to work and partner with U.S. investors, and the wide range of sectors in which to invest, from manual labor to technology.
As Econ-Tourism trip participants speak with Ethiopian entrepreneurs, they often comment about the positive attitudes and drive of the management teams they meet, the signs pointing to growth in the agriculture, healthcare, energy, and technology sectors, and the work of the companies to improve the lives of employees.
Renew Capital is an Africa-focused impact investment firm that backs innovative companies with high-growth potential. Renew Capital manages investments made on behalf of the Renew Capital Angels, a global network of angel investors, foundations and family offices who seek financial returns and sustainable social impact. For the latest on investing in Africa, subscribe and follow us at our social links below.