RENEW Speaks at Posner Center Business Leaders’ Event in Denver
By Tom Scriven, CFA | Tue Mar 01 2016
Last week, I had the pleasure of speaking at the Posner Center for International Development’s annual Business Leaders’ event in Denver, Colorado. The event highlighted activities of Posner Center tenants and international companies working together to pursue both business goals and development objectives.
I was honored to join keynote speaker, Kelly Brough, CEO of the Denver Metro Chamber of Commerce, in commending the Colorado-based businesses and NGOs in attendance to continue their already vibrant collaborations in the international arena to realize business growth and social impact. Developing countries, such as those on the African continent in which RENEW operates, present unique opportunities for such collaboration. These countries possess new markets, new supply chains, and opportunities for technology transfers, strategic acquisitions and equity investments.
Ethiopia is an example of one market that is seeing significant growth and attracting the attention of NGOs, businesses and investors alike. Ethiopian companies in RENEW’s portfolio are responding to the growing demands of the country’s more than 95 million people and an ever increasing middle class. These dynamics are contributing to Ethiopia being consistently ranked among the top 10 fastest growing economies in the world.
International businesses and investors are looking to Ethiopia for its significant agricultural potential, particularly in areas of coffee, sesame, honey, cut flowers, livestock, and cotton, among others. But, there are clear needs for technology transfers, value chain improvements and outside expertise to unlock this potential. Attractive returns on investments can be realized by responding to these needs. Companies like Samsung, Dow, Heineken, Coca Cola, H&M, WalMart, GE, among many others, as well as RENEW’s Impact Angel Network (IAN), are making or actively considering these opportunities to benefit from and help contribute to Ethiopia’s growth.
Collaboration is often key to these investments, as companies seek to navigate an unfamiliar regulatory environment and tailor products and services to local consumer preferences and needs. During my conversation at Posner last week, I highlighted several examples of such collaboration between U.S. businesses and Ethiopian companies, including those in the Impact Angel Network portfolio. These partnerships are providing access to new markets and knowledge transfers, which benefits both companies – the Ethiopian portfolio company and the U.S,-based partner.
Frontier markets, like Ethiopia, are still volatile, so it is important to have appropriate hedging strategies in place (talk to your investment adviser, if you are considering investment opportunities in these markets). There are challenges to investing and doing business that warrant patience. In some instances, an effective strategy may be to enter a frontier market with a local partner and, in a more limited way, initially to allow for adaptation to the local context while building a company that operates to international standards. This is one reason why RENEW and the Impact Angel Network focus their investments on small and mid-size companies: invest in smaller companies and provide them the capital, networks and mentoring they need to scale. In this way, a small investment can now provide significant upside potential and exposure to an exciting part of the world economy.
RENEW thanks the Posner Center for International Development for inviting us to participate in its annual Business Leaders’ event. The Posner Center is a Denver, Colorado-based shared work space and community of innovators whose mission is to grow lasting solutions to global poverty.
RENEW is an impact investing firm working in Ethiopia through its partnership with USAID activities. It has been facilitating impact investments in East Africa and Asia since 2008. RENEW manages the Impact Angel Network, one of the largest U.S. based angel networks for Africa.
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.