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Ten Years Invested to Grow a Company, Build a Nation and Leave a Legacy

By Margaret Mandeya | Mon Jan 30 2023
Renew Capital team shares their vision for African SMEs 
The year 2022 marked a decade since Renew Capital started its journey in Africa to support small and medium enterprises (SMEs) by providing the “missing middle” with the capital they need to build the private sector. From its inception, Renew Capital has been guided by the philosophy that investment and good management can transform SMEs into market leaders that drive the economic transformation of the continent. 
Building on a vision, the Renew Capital 2021-2022 Impact Report notes over the past decade our work in Africa has mobilized close to $39M in capital and created over 2,200 jobs. Renew Capital has also grown its African presence from Ethiopia to eight countries, adding Kenya, Mozambique, Nigeria, Tanzania and Zambia, with plans to expand its presence to seven additional countries by the end of 2023. 
In the report, Renew Capital Chief Operating Officer Emily Ziethen said that over the next decade, the world will recognize Africa as a private-sector success story.  
“We’ll see a thriving and resilient middle class and inspired and successful entrepreneurs creating SMEs that, in turn, create millions of decent jobs for men and women.” 
Renew Capital is hopeful that growth can alleviate poverty and increase productivity in a region with a large youth population. “Africa’s private sector represents real hope for the billion+ people who live on the continent,” she added. 
Renew Capital Angels member Jodi Morris captured that vision in her statement for the Impact Report.
“In the next 10 years, my hope is that when I tell people that I have just returned from Africa, they don’t ask me how I enjoyed safari,” she said.
“I see emerging models for education developing the future leaders for Africa in Africa. I see young and vibrant cities with a rising middle class, and entrepreneurs developing world-class companies to serve them. Finally, I see a new realization in the West—that Africa has much to teach us.” 
In fact, Africa is proving itself to be a hotbed of innovation, creative problem-solving and a resilient entrepreneurial spirit. According to the pan-African network of innovation and technology hubs, AfriLabs, as of 2019, there were more than 643 active tech hubs on the continent with at least one hub in each country supporting the burgeoning entrepreneurial scene. In fact, according to Africa: The Big Deal, African startups raised over $4.8B in 2022, breaking the record year for the past years.  
“In Kenya, SMEs have been identified as the country’s key engine for economic growth and employment creation,” says Renew Capital Investment and Project Manager for Kenya, Esther Mwikali. 
She adds, “We are constantly seeing the importance of investment to the Kenyan ecosystem, which has grown to have a tech reputation, dubbed “Silicon Savannah”, characterized by some phenomenal innovation and entrepreneurs making Kenya the second most popular investment destination after Nigeria.”
Still, a lot of capital needs to be poured into the continent’s private sector to create the millions of jobs needed, Renew Capital Founder and CEO Matthew Davis explained in the report. 
“If during the next 10 years, 25% of the $40B Official Development Assistance (ODA) could be diverted to SME-focused blended finance projects that deliver 5X or more leverage from the private sector, we could attract more than $50B to invest in businesses and, by my estimate, create 8 million jobs per year—effectively closing Africa’s job gap.” 
Renew Capital has deployed a model of blended finance for the last decade with a growing partner portfolio including Global Affairs Canada, USAID, AGRA, the Dutch Entrepreneurial Development Bank (FMO), Refugee Investment Network and the World Bank’s Gender Innovation Lab among others. Notably, Renew Capital recently signed an agreement with Global Affairs Canada to launch a seven-year Accelerating Regional Business Growth (ARBG) project to spur regional business development. The project aims to support the mobilization of capital and train SMEs to harness the Africa Continental Free Trade Area (AfTCA). According to the AfCFTA Secretariat, the AfCFTA signed in 2018 is the largest regional trade bloc in the world covering about 1.3 billion people. As of 2022, it represents a GDP of $3.4T and is estimated to grow to $29T by 2050.  
“We see tremendous potential to increase trade between African countries, driven by investments in small and medium-sized firms that are the bedrock of these economies,” said Renew Capital Angels Member and Director of Regional Private Sector Projects of Renew Capital Lucas Robinson. “The companies that we’re working with are investing in new technologies and hiring talent to drive growth. It’s inspiring to work alongside them.”
One of our recent investments, Teraki, a diverse online audio platform, is a good example of youth-driven innovation and nation-building. Founded by two young Ethiopian tech innovators, Nahom Tsegaye and Abel Engida, the company is helping to bring together Ethiopians from across the globe through audiobooks and podcasts in various local languages.
“Our generation is highly and increasingly dependent on technology, and Ethiopian youth are increasingly using Teraki to understand different current affairs and define our place in this world,” said co-founder Nahom Tsegaye. 
That’s a mission Renew Capital is confident it can help promote. 
“In the next 10 years, we are all going to realize that Africa has been the best solution for Africa all along,” Renew Capital Senior Investment Manager Diana Njuguna said in the report. 
Learn more about our ten years invested in Africa in “Building on a Vision: 2021-2022 Impact Report” and subscribe to our newsletter to keep up with investment news and more.
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.

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