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RENEW Celebrates Four Years of Investing in Ethiopia
Initially, it was overlooked. But back in 2012, it had excellent fundamentals and was poised for growth. In fact, Ethiopia is now considered to be one of the top ten fastest-growing economies in the world.
In step with the impressive change that we see out our office window every day, the government has made strides to improve the investment environment. While private equity still is confused with more familiar forms of foreign investing, such as joint ventures and greenfield, the various government agencies, local banks and entrepreneurs are learning the benefits of private equity and how it can help drive the growth of their country.
RENEW is very similar to a traditional venture capital firm, in the sense that we do many of the same activities (sourcing, vetting, due diligence, etc.), but we have this other unique component to our model - the Impact Angel Network (IAN). Having the IAN gives us a huge competitive edge over other investment models. While we may lose the advantage of having a ready available pool of capital to draw from, we do have: 1) time, 2) flexibility, and 3) the wisdom of our investors. Time, because our capital deployment is not constrained by a set period, rather we can take our time, which is required to be a successful and patient investor in the region. Flexibility, because we can do smaller deals and we are not locked into rigid investment parameters. And most importantly, we are able to leverage the collective wisdom of the network. We currently have more than 70 bank executives, business men and women, and entrepreneurs who help us select the best investments for the network.
Every year our team becomes sharper. We are committed to the continent – RENEW will be here 30 years from now. Every day our team grows smarter. We are not immune to mistakes, but we see them as the best type of learning opportunity that we can have, because investing in this part of the world is largely uncharted territory.
Learning what it means to be a successful business in a country like Ethiopia is, in some aspects, the same as it would be anywhere else. But, there is a good 30% that takes a unique skill-set and mindset that cannot be learned quickly. It took us a while to understand how valuable that 30% is, and how our understanding of the current economic and business environment of the country is always adapting and evolving.
It's simple: find, invest in and grow amazing companies, and in the process, make a good return and a positive impact in the country.
Angel investing has definitely become popularized with shows like Shark Tank. Impact investing is clearly on a major growth trend. In fact, we are on the verge of history’s largest transfer of wealth between generations. Recent studies have indicated that an estimated $59 trillion will be transferred between generations in the U.S. over the coming decades. As younger generations and millennials take control of this wealth, we believe impact investing will continue to grow in prominence.
500 members, five countries and 50 investments in five years. You can do the math for 10 years!