<h1>The Future of Africa’s Private Sector</h1>Still small, but massive, fast-moving and digital<img src="/uploads/Skyline_Landscape_Mobile_Money_50beba7137.avif">For decades, the "African growth" narrative has been stuck in a time loop. From development banks to global financial journals, the message has been consistent: for Africa to prosper, it must industrialize through factories, infrastructure, commercial agriculture and a formal manufacturing base capable of absorbing the millions of young people entering the workforce each year.But one possible view from the ground, and I should note that my husband and I have lived in Africa and invested in startups across the continent for more than 14 years, suggests something different. Our sense is that the factories are not arriving fast enough, and the formal jobs are not appearing at the scale many hoped. The reality we see as we travel across Africa often looks quite different.This reality raises a broader question:&nbsp;should we stop trying to fit Africa into a 20th-century development model? At a moment when technology is reshaping nearly everything we do, could Africa instead be at a point where it develops a different model of growth altogether?&nbsp;<h2>The Myth of the Industrial Savior</h2>Publications such as&nbsp;The Economist (<a href="https://www.economist.com/special-report/2025/01/06/africa-has-too-many-businesses-too-little-business?utm_medium=cpc.adword.pd&amp;utm_source=google&amp;ppccampaignID=17210591673&amp;ppcadID=&amp;utm_campaign=a.22brand_pmax&amp;utm_content=conversion.direct-response.anonymous&amp;gclsrc=aw.ds&amp;gad_source=1&amp;gad_campaignid=17210596221&amp;gbraid=0AAAAADBuq3IrrOn13siii2pkXA3wnZ7mz&amp;gclid=Cj0KCQjwgr_NBhDFARIsAHiUWr7_yQi40h-TXYi0hqjfcZ3hQxFQ7EkeXhfRVA0alVZMFTq3LsSuJekaAqEYEALw_wcB">Africa has too many businesses, too little business</a>) point to Africa’s "disappointing" manufacturing performance. The continent’s share of&nbsp;<a href="https://futures.issafrica.org/blog/2025/Unlocking-Africas-manufacturing-potential#:~:text=Energy%2C%20transport%20and%20reforms%20are,the%20global%20manufacturing%20value%20chain.">global manufacturing value-added is less than 2%</a>. The argument is straightforward: without a large manufacturing base to drive growth, Africa risks remaining stuck in low-productivity informal work.&nbsp;But this is the 20th-century model. It overlooks recent developments, such as the massive, mobile tech-surge happening across the continent and, more recently, AI.Some interesting news that points to a new development model could be first, that sub-Saharan Africa has more&nbsp;<a href="https://www.forbesafrica.com/current-affairs/2025/04/09/sub-saharan-africa-dominates-global-mobile-money-landscape-with-1-1-billion-accounts-new-report-finds">mobile money accounts than any other region of the world, combined.</a> Another development is smartphone adoption — Africa is one of the fastest growth markets in the world. Young Africans are building and running businesses on their phones, skipping right over laptops.&nbsp;<figure class="image"><img src="/uploads/image_6089a72815.png"></figure>Source:&nbsp;<a href="https://ourworldindata.org/mobile-money-why-it-matters">Our World in Data</a><h2>From Micro-Shop to Tech-Enabled Business</h2>In the past, an entrepreneur running a small shop in a local market might spend 30% to 40% of their time dealing with friction. Closing the shop to travel to wholesalers. Waiting in long lines at the bank to wire cash to a loved one or a supplier. Operating without records that could demonstrate creditworthiness.Technology is removing much of that friction.<ul><li>Inventory at the fingertips: Apps now aggregate wholesaler inventories, allowing entrepreneurs to browse and order products directly from their place of business.</li><li>Frictionless payments: Transactions move through digital wallets rather than cash boxes, creating a record that was previously invisible to the financial system.</li><li>Embedded finance: That digital transaction history, the everyday "data exhaust" of commerce, is increasingly being used to unlock credit.</li></ul>What once looked like informal trading increasingly resembles mobile-first, data-rich small businesses.<h2>The Surge: Why "Small" May Be Huge</h2>All this leads me to wonder if Africa will not develop the same way as other emerging markets. By moving directly from limited infrastructure to smartphones and high-speed connectivity, many entrepreneurs are adopting tools and market access faster than previous generations of business owners ever could.At Renew Capital, this is one place we see momentum building within Africa’s private sector. Rather than waiting for a perfectly formalized market to emerge, we invest in tools that make the existing market more efficient. Portfolio companies such as&nbsp;<a href="https://www.hypeo.ai/en">Hypeo AI</a> in Morocco and&nbsp;<a href="https://www.njiapay.com/">NjiaPay</a> in South Africa are examples of this approach, building technology that helps founders scale businesses without the constraints of legacy infrastructure.Africa’s jobs challenge is real. The continent needs to&nbsp;<a href="https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/jobs-for-youth-in-africa/what-is-the-jobs-for-youth-in-africa-strategy">absorb 10-12 million new workers</a> each year to keep pace with population growth.But the solution may not look like a traditional industrial park. It may instead emerge from a decentralized, tech-enabled network of millions of entrepreneurs gaining access to better information, better tools and, increasingly, smarter capital.One possible future for Africa’s private sector may not be defined by large factories, but by millions of digitally connected businesses growing from the ground up.If that future is unfolding already, the question becomes: are investors, policymakers and institutions prepared to recognize it?&nbsp;We’d love to hear your thoughts. Please share what you’re seeing and what models you think will work in what we believe will be the most exciting market to emerge in the next 50 years.&nbsp;

Still small, but massive, fast-moving and digital

Perspectives

Skyline Landscape Mobile Money.avif

The Future of Africa’s Private Sector

<h1>Press Release: Technopark and Renew Capital Partner to Strengthen South–South Cooperation and Launch Renew Capital’s North and West Africa Headquarters in Morocco</h1><a href="https://latest-api.renewcapital.com/uploads/FINAL_Technopark_and_Renew_Capital_Partnership_Press_Release_e2880a489f.pdf">Download Full Press Release</a>CASABLANCA, Morocco, December 4, 2025 — <a href="https://www.technopark.ma/">Technopark</a> and Renew Capital today announced a strategic partnership marking the official launch of Renew Capital’s North and West Africa Headquarters in Morocco.<figure class="image"><img src="/uploads/MOU_Signing_Renew_Capital_Technopark_Partnership_e105b9c379.png" alt="Photo of Matt, CEO of Renew Capital, signing the partnership agreement during the Technopark and Renew Capital partnership event."></figure>This partnership reinforces Morocco’s leadership in promoting South–South cooperation, particularly in entrepreneurship, technology and investment. As a pan-African firm that has grown from East Africa for more than a decade, Renew Capital is now expanding westward and northward, connecting Morocco to fast-growing innovation ecosystems across the continent. This approach aligns with His Majesty King Mohammed VI’s vision to deepen African integration and foster productive cross-continental collaboration.Through this collaboration, Renew Capital will support Moroccan and North African entrepreneurs in expanding into sub-Saharan and East African markets, while also connecting Moroccan institutions to emerging opportunities across Africa. The goal is to help turn Moroccan and African startups into regional champions capable of scaling beyond their home markets.“Our ambition is to back bold entrepreneurs and help them grow across Africa,” said&nbsp;<a href="https://www.linkedin.com/in/laura-davis-25764430/">Laura Davis</a>, Managing Partner and Co-CEO of Renew Capital. “Morocco’s entrepreneurial spirit and strategic position make it the ideal base for our operations in North and West Africa. With this partnership, we are building a bridge between Morocco, East Africa and other dynamic regions of the continent.”The signing ceremony, held at Technopark Casablanca, brought together leaders from the innovation ecosystem, diplomatic representations and the private sector, reaffirming Morocco’s role as a gateway for technology, investment and cross-African collaboration.About TechnoparkTechnopark Casablanca is Morocco’s leading hub for technology and entrepreneurship, supporting hundreds of startups and SMEs and advancing Morocco’s digital economy and Africa-focused innovation.About Renew CapitalRenew Capital is a pan-Africa investment firm with a presence in 13 countries.&nbsp;We back the bold founders using technology to pursue Africa’s greatest opportunities.With more than a decade of investing on the continent, Renew Capital is among the most active investors building Africa’s thriving private sector.&nbsp;

Renew Capital opens its North and West Africa headquarters in Morocco through a strategic partnership with Technopark.

Morocco

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Press Release: Technopark and Renew Capital Partner to Strengthen South–South Cooperation and Launch Renew Capital’s North and West Africa Headquarters in Morocco

<h1 style="margin-left:0px;">The Franc Zone Advantage</h1>Republished from&nbsp;<a href="https://theafricabrief.beehiiv.com/p/africa-in-brief-november-7-2025">Africa in Brief - November 7, 2025</a><figure class="image"><img src="/uploads/The_Franc_Zone_Advantage_Graphic_of_the_Week_November_07_9294b4ee5e.png" alt="Chart showing real GDP growth forecasts for rated WAEMU economies, highlighting strong economic growth across West Africa’s CFA franc zone over the next two years."></figure>Source: <a href="https://www.spglobal.com/ratings/en/regulatory/article/250331-waemu-sovereigns-can-weather-mounting-global-geopolitical-and-trade-risks-s101617317?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">S&amp;P Global</a>I was in Togo last week and now I’m curious about everything West African Economic and Monetary Union (WAEMU/UEMOA), an eight-country bloc of roughly 140 million people sharing the CFA franc (XOF) and a single central bank, the Central Bank of West African States (BCEAO). The union seems to be quietly tightening financial integration while modernizing its digital infrastructure. From Dakar to Lomé, UEMOA is rolling out instant payments and pulling fintechs into the formal system under one rulebook.Why it matters:<ul><li>Shared rails, shared currency: The BCEAO launched an instant payments platform (PI-SPI) linking all eight members for 24/7 cross-border transactions — a major step toward a unified digital market.</li><li>Fintech legitimacy: The BCEAO has now licensed about 30 fintechs, including 10 new approvals in September 2025.</li><li>New rulebook: Instruction 001-01-2024, issued in January 2024, introduced tougher standards on capital, governance and compliance for fintechs and payment firms.</li><li>Innovation bridge: The BCSF-UEMOA, BCEAO’s fintech unit, tracks 130+ startups and mediates between innovators and regulators — rare coordination on the continent.</li><li>Currency credibility: The CFA franc’s peg to the euro has kept inflation among Africa’s lowest and built investor confidence in the zone’s stable members.</li></ul>Dose of reality:<ul><li>Uneven integration: Stronger economies like Côte d’Ivoire and Senegal lead, while landlocked states lag.</li><li>Security strains: Coups in Mali, Niger and Burkina Faso threaten cohesion and confidence.</li><li>French ties linger: The euro peg ensures stability but fuels political resentment over perceived loss of monetary sovereignty.</li></ul>Quick take:&nbsp;According to fintechs I spoke to last week in Togo, like&nbsp;<a href="https://gozem.co/en/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">Gozem</a> and&nbsp;<a href="https://solimi.co/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">Solimi</a>, UEMOA is an incredibly functional monetary union: one currency, one central bank and one fintech framework.&nbsp;Sources:&nbsp;<a href="https://www.imf.org/en/Publications/CR/Issues/2025/05/19/West-African-Economic-and-Monetary-Union-Staff-Report-on-Common-Policies-for-Member-567030?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">IMF 2025 West Africa Staff Report</a>,&nbsp;<a href="https://www.uemoa.int/en/presentation-of-uemoa?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">UEMOA</a>,&nbsp;BCEAO (<a href="https://www.bceao.int/sites/default/files/inline-files/Instruction-No001-01-2024_relative_aux_services_de_paiement_dans_l-UMOA.pdf?utm_source=chatgpt.com">Instruction No. 001-01-2024 PDF</a>, <a href="https://www.bceao.int/fr/communique-presse/lancement-de-la-plateforme-interoperable-du-systeme-de-paiement-instantane-de?utm_source=chatgpt.com">PI-SPI Launch Press Release</a>, <a href="https://www.bceao.int/fr/content/fintech-et-digitalisation-des-services-financiers-dans-luemoa?utm_source=chatgpt.com">Fintech and Digitalization Overview</a>).<figure class="image"><img src="/uploads/The_Franc_Zone_Advantage_2_e4a1e19ac8.png"></figure>Source: <a href="https://www.imf.org/en/Publications/CR/Issues/2025/05/19/West-African-Economic-and-Monetary-Union-Staff-Report-on-Common-Policies-for-Member-567030?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-november-7-2025">IMF</a>

West Africa’s Franc Zone is quietly building a digital financial powerhouse — one currency, one rulebook and one central bank.

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The Franc Zone Advantage

<h1>The $2T Crypto Current</h1>Republished from&nbsp;<a href="https://theafricabrief.beehiiv.com/p/africa-in-brief-october-24-2025">Africa in Brief - October 24, 2025</a><figure class="image"><img src="/uploads/Screenshot_2025_10_28_at_13_07_44_64f6a3c280.png"></figure>Source:&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2025/07/11/Decrypting-Crypto-How-to-Estimate-International-Stablecoin-Flows-568260?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">IMF Working Paper</a>The IMF’s&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2025/07/11/Decrypting-Crypto-How-to-Estimate-International-Stablecoin-Flows-568260?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Decrypting Crypto (July 2025)</a>&nbsp;is supposedly the first study to use AI to track where&nbsp;$2T in stablecoins actually flowed in 2024 and Africa is relevant.What the study found<ul><li>As expected, stablecoin activity was highest in North America ($633B) and Asia-Pacific ($519B) but&nbsp;Africa and the Middle East ranked second globally relative to GDP (6.7%), showing how quickly the region is embracing digital dollars.</li><li>In Africa, only&nbsp;14% of flows stayed within the region, suggesting that most activity supports cross-border remittances, trade and dollar access.</li><li>Users leaned heavily on Binance (74%) over Coinbase (26%) and favored Tether’s USDT (57%) over USDC (43%), reflecting Africa’s tilt toward emerging market exchanges and tokens.</li><li>Average transaction size: $13,108; median: $100—evidence that small-value transfers drive much of the activity.</li><li>Globally, $54B in net outflows from North America show that stablecoins are now meeting global dollar demand, especially when local currencies weaken.</li><li>The March 2023 U.S. banking crisis sharply disrupted flows from North America, exposing how closely crypto rails depend on traditional banks.</li></ul>Why it matters for Africa:&nbsp;The data confirms what’s visible on the ground. Africans are using stablecoins as a digital dollar lifeline—for remittances, trade and inflation protection but it also signals new dependencies. As access to exchanges and off-ramps shapes who can move money, Africa’s financial future may hinge as much on crypto connectivity as on banking reform.Here’s a quick rundown of African countries that have begun regulating virtual assets.Enacted frameworks<ul><li>South Africa: Crypto is a regulated “financial product.” The Financial Sector Conduct Authority has issued dozens of licenses and keeps approving new ones, including recent news on exchange/derivatives activity (<a href="https://www.reuters.com/world/africa/south-africas-financial-conduct-regulator-approves-59-crypto-licences-2024-03-13?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Reuters</a>,&nbsp;<a href="https://www.moneyweb.co.za/moneyweb-crypto/valr-becomes-sas-first-licensed-crypto-derivatives-issuer/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">MoneyWeb</a>,&nbsp;<a href="https://www.itweb.co.za/article/financial-regulator-expands-crypto-investment-choices/wbrpOqg2OKVMDLZn?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">ITWeb</a>).</li><li>Mauritius: Full regime for virtual assets and token issuers under the Virtual Asset and Initial Token Offering Services Act, with licensing by the Financial Services Commission (covers stablecoin issuers too) (<a href="https://charltonsquantum.com/mauritius-virtual-assets-regulation/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Charlton's Quantum</a>,&nbsp;<a href="https://www.zitadelleag.com/news/initial-token-offering-licensing-in-mauritius-stablecoin-digital-yuan-lssuers?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Zitadelleag</a>).</li><li>Botswana: Virtual Assets Act, 2022, in force; licensing of Virtual Asset Service Providers (VASP) under the Non-Bank Financial Institutions Regulatory Authority&nbsp;(<a href="https://botswanalaws.com/consolidated-statutes/principle-legislation/virtual-assets-act?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Botswana Laws</a>,&nbsp;<a href="https://www.webberwentzel.com/News/Pages/virtual-assets-regulation-in-southern-africa-a-regional-comparative-analysis-article.aspx?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Webber Wentzel</a>).</li><li>Namibia: Virtual Assets Act, 2023 in force with detailed rules (custody, capital, disclosure, cybersecurity). Bank of Namibia is the regulator (<a href="https://www.afriwise.com/blog/namibia-the-virtual-assets-act-10-of-2023---what-should-you-know?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Afriwise</a>,&nbsp;<a href="https://bowmanslaw.com/insights/the-virtual-assets-act-10-of-2023-what-should-you-know?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Bowmans Law</a>).</li><li>Nigeria: Securities and Exchange Commission rules exist and banks may serve licensed crypto firms after the central bank revised its 2023 circular. Enforcement has tightened around unregistered platforms (<a href="https://www.elibrary.imf.org/view/journals/002/2025/158/article-A002-en.xml?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">IMF</a>,&nbsp;<a href="https://www.reuters.com/technology/nigeria-plans-additional-rules-combat-illegal-trading-digital-assets-2024-05-07?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Reuters</a>,&nbsp;<a href="https://www.ft.com/content/333309a5-196c-494a-8d68-506f6a19ba81?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">FT</a>).</li></ul>New or near-final laws<ul><li>Kenya: The parliament passed the Virtual Asset Service Providers Bill in October 2025. It creates licensing for exchanges under the Capital Markets Authority (CMA) and assigns stablecoin licensing to the Central Bank (awaiting presidential assent) (<a href="https://www.reuters.com/business/media-telecom/kenya-parliament-passes-crypto-asset-law-boost-investments-2025-10-13/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Reuters</a>,&nbsp;<a href="https://www.parliament.go.ke/sites/default/files/2025-04/THE%20VIRTUAL%20ASSET%20SERVICE%20PROVIDERS%20BILL%2C%202025%20%282%29.pdf?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Parliament of Kenya</a>).</li><li>Rwanda: In March 2025, the National Bank of Rwanda and the CMA introduced a draft framework for virtual assets and VASPs (<a href="https://www.newtimes.co.rw/article/24694/news/economy/rwanda-moves-to-regulate-virtual-assets-with-new-draft-law?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">The New Times</a>).</li><li>Morocco: A nationwide ban remains but Bank Al-Maghrib has prepared a draft crypto law now moving through adoption; Central Bank Digital Currency work is also underway&nbsp;(<a href="https://www.reuters.com/technology/morocco-preparing-law-allow-cryptocurrencies-central-bank-chief-says-2024-11-26/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Reuters</a>).</li></ul>Exploring or signaling next steps<ul><li>Ethiopia:&nbsp;Crypto remains illegal for payments but the National Bank of Ethiopia and Financial Intelligence Service are developing a framework to regulate virtual assets and VASPs as part of new anti-money laundering reforms (<a href="https://www.ainvest.com/news/ethiopia-finalize-crypto-framework-2025-bans-payments-2506/?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">AI Invest</a>).</li><li>Ghana:&nbsp;The Bank of Ghana required VASPs operating in the country to register by August 15, 2025, ahead of the planned VASP Act expected later this year (<a href="https://www.bog.gov.gh/wp-content/uploads/2025/07/NOTICE-NO.-BG-GOV-SEC-2025-18-NOTICE-ON-MANDATORY-REGISTRATION-OF-VIRTUAL-ASSET-SERVICE-PROVIDERS-OPERATING-IN-GHANA.pdf?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">Bank of Ghana</a>).</li><li>Zambia: Authorities have flagged a forthcoming framework; public materials note draft work on crypto and stablecoins for stakeholder review in 2025 (<a href="https://www.boz.zm/Zambanker_June_2024_Edition.pdf?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">ZamBanker</a>).</li></ul>Still prohibitive<ul><li>Egypt: Trading and promotion require a Central Bank of Egypt license, which has not been issued; effectively, a prohibition remains in place (<a href="https://iclg.com/practice-areas/fintech-laws-and-regulations/egypt?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">ICLG Business Reports</a>).</li></ul>And for those still asking, “how do the flows actually work?”:&nbsp;<figure class="image"><img src="/uploads/Screenshot_2025_10_28_at_12_52_27_95000be7c3.png" alt="Global Crypto Flow Map: How Digital Currencies Move Across Borders"></figure>Source:&nbsp;<a href="https://www.imf.org/en/Publications/WP/Issues/2025/07/11/Decrypting-Crypto-How-to-Estimate-International-Stablecoin-Flows-568260?utm_source=theafricabrief.beehiiv.com&amp;utm_medium=referral&amp;utm_campaign=africa-in-brief-october-24-2025">IMF Working Paper</a> &nbsp;

IMF data shows $2T in global stablecoin flows, with Africa among the fastest-growing regions, using crypto for remittances, trade and dollar access as more nations regulate digital assets.

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The $2T Crypto Current

<h1>Renew Capital Legal Brief - March 2025</h1>The latest changes in Africa's regulatory environmentWith a growing presence in Africa’s startup ecosystems, the Renew Capital team stays on top of the legal landscapes shaping the venture capital and investment space and provides insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment.&nbsp;<figure class="image"><img src="/uploads/Legal_Brief_b1a20116be.png"></figure><h2>Egypt</h2>Financial Regulatory Authority (FRA) reiterates licensing requirements for insurance companies:The FRA has announced updated licensing guidelines for insurance companies. Current and prospective insurers must now be joint stock companies, meet paid-up share capital requirements and have qualified board members. Moreover, offering both life and property insurance services by the same entity is prohibited, except for&nbsp;microinsurance companies or&nbsp;HMOs. Existing firms have five months to comply with these new standards.Why it matters: Licensed insurance companies should conduct internal reviews to ensure compliance with the licensing requirements or face the risk of penalties or license revocation.<h2>Ghana</h2>2025 Budget Statement and Economic Policy of the Government of Ghana:The Government of Ghana, through the Minister for Finance, has presented the Budget Statement and Economic Policy for the year 2025. Key tax proposals include the abolition of several taxes, such as the withholding tax on lottery winnings and the electronic transfer levy, as well as exempting individuals earning the minimum wage or less from income tax. The proposed VAT reforms aim to eliminate the COVID-19 levy, reduce the effective VAT rate and raise the registration threshold to exempt small businesses, with implementation set for 2025. Additionally, the budget outlines plans to restructure and consolidate existing levies, introduce road tolls and establish a new legal framework for non-tax revenue collection.Why it matters: This is important because the changes outlined in Ghana's 2025 Budget directly impact the country’s economic environment, businesses and individuals. This could stimulate economic growth, improve disposable income for workers and promote entrepreneurship.<h2>Kenya</h2>Potential increase in banking license fees:The Central Bank of Kenya (CBK) is taking decisive action to modernize the licensing fee methodology for banks by linking license fees directly to the gross annual revenue of each institution. This new approach is a significant shift from the current system, which bases fees on the number of bank branches. The CBK has released draft banking (fees) regulations for public comment and upon approval, these regulations will require every bank to contribute a percentage of its gross annual revenue. The licensing fee will be set at an initial rate of 0.6% with a gradual increase to 1% by 2027.Why it matters:&nbsp;Increasing license fees for banks will undoubtedly create a ripple effect that impacts both customers and third-party service providers, leading to higher fees for banking services.<h2>Morocco</h2>Morocco's National Agency for Telecommunications Regulation (NATR) issues new labeling rules:The NATR has directed that all telecommunication devices (including phones, laptops, smartwatches and routers) be labeled with their Specific Absorption Rate (SAR) values. The SAR values should be displayed on the products, user manuals, packaging, or electronic labels. This new rule will become enforceable on May 1, 2025 and any contraventions will result in fines for manufacturers.Why it&nbsp;matters: Proper labeling of telecommunication devices will enhance consumer protection and ensure greater transparency in the Moroccan telecommunications sector.&nbsp;&nbsp;<h2>Nigeria</h2>Nigeria's Senate passes Investment and Securities Bill:The Nigerian Senate has successfully passed the long-awaited bill, which is now pending assent from the country’s President. This landmark legislation is set to modernize and strengthen the statutory framework for Nigeria's capital markets. Among the significant changes is the official recognition of virtual assets as securities.Why it matters: The bill, once approved, will significantly strengthen investor protection, align with the latest developments in the capital markets and lead to more efficient legislation.<h2>Rwanda</h2>Rwanda issues virtual assets bill:On March 6, 2025, the Rwandan Capital Markets Authority (CMA) unveiled a bill for the regulation of virtual asset operations in Rwanda. The bill aims to foster innovation in the virtual asset sector while also preventing and mitigating associated risks. The CMA will be the primary regulatory and licensing authority but will consult and collaborate with the National Bank of Rwanda to safeguard the integrity of Rwanda’s financial system.Why it matters: Once passed, this bill will advance financial stability in Rwanda and boost investors’ confidence in virtual assets’ businesses and activities in Rwanda.&nbsp;<h2>South Africa</h2>The South African Reserve Bank (SARB) redefines bank activities&nbsp;The SARB intends to exempt a certain payment activity from the scope of the “business of the bank”. This activity is the pooling of funds into a store of value or payment account by a non-bank for conducting payment activities. Therefore, non-bank entities that carry out such activities can operate without a banking license, subject to meeting stipulated conditions. A draft notice, to this effect, has been issued by the SARB for public comment.Why it matters: The exemption will ease the regulatory burden of payment service providers and other stakeholders that store funds to facilitate their payment services.&nbsp;<h2>Uganda</h2>Bank of Uganda is set to regulate mortgage refinancing institutions:On March 12, the Ugandan Parliament was presented with a landmark bill to regulate the establishment of mortgage refinancing institutions for the first time. Once passed, this bill will empower the Bank of Uganda to issue licenses to mortgage refinanciers and establish a robust administrative framework for mortgage refinancing operations across the country.&nbsp;Why it matters: Establishing mortgage refinanciers will increase access to finance for primary mortgage financing institutions and facilitate affordable housing in Uganda in the long term.&nbsp;<h2>Zambia</h2>Zambia’s Data Protection Commission (DPC) gets set to enforce data protection legislation:The DPC is ready to mete out fines and prosecute entities operating in contravention of Zambia’s Data Protection Act of 2021. Data processors and controllers are therefore encouraged to complete the registration process and implement robust security measures. The DPC intends to commence the enforcement measures in March 2025.Why it matters: Organizations that handle personal data face the risk of fines or legal action if they fail to comply with data protection legislation.<h2>Cross-border</h2>Ghana and Rwanda collaborate on a license passport framework:Both countries have agreed to a mutual framework that allows regulated fintech companies from one country to operate in the other with minimal additional regulatory requirements.&nbsp;Why it matters: This initiative enables Ghanaian and Rwandan fintech companies to expand their services with minimal regulatory barriers, driving significant innovation and fostering economic growth in both countries. &nbsp;

With a growing presence in Africa’s startup ecosystems, the Renew Capital team stays on top of the legal landscapes.

Legal Corner

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Renew Capital Legal Brief - March 2025

<h1>Renew Capital Legal Brief - February 2025</h1>The latest changes in Africa's regulatory environmentWith a growing presence in Africa’s startup ecosystems, the Renew Capital team stays on top of the legal landscapes shaping the venture capital and investment space and provides insights for investors, entrepreneurs, industry leaders and policymakers in Africa’s dynamic business environment.&nbsp;<h2><img src="/uploads/Newsletters_and_Legal_Brief_1_f6e6e92849.png"> Egypt</h2>New fiscal incentives for small and medium enterprises (SMEs):<ul><li>The President of Egypt has introduced a new fiscal framework for SMEs engaged in professional activities, with an annual turnover of up to $40K (20M Egyptian pounds), provided they meet certain requirements. This framework offers exemptions from stamp duties, company and land registration fees and capital gains taxes, along with reduced minimum corporate income tax rates for qualified SMEs.</li></ul>Why it matters: The new fiscal framework establishes a conducive environment for business operations, thereby encouraging increased commercial activities and promoting economic growth.<h2>Ethiopia</h2>Ethiopia prepares for foreign investments in its exchange market:<ul><li>The National Bank of Ethiopia, alongside the Ethiopian Capital Market Authority and Ethiopian Investment Holdings, is actively pursuing the opportunity to allow foreign investments in the exchange market. The foreign investments may, however, be capped at a quota of 30%.</li></ul>Why it matters: Allowing the entry of foreign investors will boost Ethiopia’s exchange market and provide more capital inflow within the country.<h2>Ghana</h2>Ease of doing business: Ghanaian companies are now categorized into small, medium and large enterprises -<ul><li>Small companies - Companies with revenue or assets up to $26K (400K GHS)&nbsp;</li><li>Medium companies - Companies with revenue or assets between $26K to $646K (400K GHS to 10M GHS)&nbsp;</li><li>Large companies - Companies with revenue or assets exceeding $646K (10M GHS)&nbsp;</li></ul>With this categorization, small companies are now exempt from mandatory external audit requirements, while medium and small companies no longer need to file full annual returns with the Office of the Registrar of Companies.&nbsp;Why it matters: This new classification system reflects a significant step toward reducing administrative burdens for these enterprises.Introduction of carbon registry:<ul><li>The Ghana Carbon Registry has been established under the Environmental Protection Act of 2025. This critical database will effectively catalog mitigation projects aimed at reducing carbon emissions and will regulate the buying and selling of carbon credits within the voluntary carbon market. The Carbon Market Committee will oversee the registry and approve mitigation projects in the registry.</li></ul>Why it matters: The establishment of the Carbon Registry signifies Ghana’s commitment to the Paris Agreement and ensures the implementation of proper regulatory standards in the Ghanaian carbon market.<h2>Kenya</h2>Regulatory framework for carbon trading:<ul><li>On February 11, the National Environment Management Authority (NEMA) issued draft Climate Change (Carbon Trading) Regulations for public review. The draft regulations outline the regulatory authorities for carbon trading activities and requirements for establishing an exchange for trading registered carbon credits. Any comments on the regulations may be submitted on or before March 5.</li></ul>Why it matters: The draft regulations show Kenya’s devotion to achieving low-carbon climate development.<h2>Morocco</h2>Finance Law 2025: With the signing of the Finance Bill into law in Morocco,&nbsp;the Finance Law for 2025 introduced the following changes:<ul><li>Revised tax incentive scheme for corporate group restructuring;</li><li>Revised withholding tax rates on income from shares and dividends;</li><li>Exemption threshold for income tax for individuals increased to $4K from $3K (40K MAD FROM 30K MAD);&nbsp;</li><li>Extension of value-added tax (VAT) exemption on fresh or frozen seasoned meat;&nbsp;</li><li>Suspension of import tariffs;&nbsp;</li><li>New taxation rules for joint ventures and economic interest groups; and&nbsp;</li><li>Temporary VAT exemption on importation of select live animals and agricultural products.</li></ul>Why it matters: Companies and other stakeholders must proactively review their tax policies and measures to align with the new fiscal regulations.<h2>Nigeria</h2>Launch of Foreign Exchange (FX) Code:<ul><li>On January 31,&nbsp;the Central Bank of Nigeria (CBN) launched the Nigeria Foreign Exchange Code. The code sets the basic standards for all participating institutions in the FX market while reinforcing ethical market practices and good governance measures.&nbsp;&nbsp;</li></ul>Why it matters: The launch of the FX code signifies the CBN’s commitment to improving the FX market and ensuring compliance by all stakeholders. It is also expected to improve FX liquidity and stop unethical FX trading practices.<h2>South Africa</h2>Upcoming changes in the labor industry:<ul><li>The South African National Economic Development and Labour Council recently issued a law reform report proposing several changes including increased statutory severance pay, exclusion of startups from council agreements’ requirements, limitation of remedies for unfair dismissals and statutory provisions for large-scale retrenchment processes.&nbsp;</li></ul>Why it matters: The proposals, if accepted, present more favorable conditions for both employees and employers in South Africa.<h2>Uganda&nbsp;</h2>Electricity market moves from a single-buyer model to a multiple-buyer model:<ul><li>The Electricity Regulatory Authority has directed that consumers with the stipulated electricity demand (mostly industrial and manufacturing companies) can now purchase electricity directly from authorized generation licensees. This directive deviates from Uganda’s previous model of a single buyer purchasing electricity on behalf of the general Ugandan populace.</li></ul>Why it matters: This change provides qualified consumers with a dependable alternative for their electricity needs.&nbsp;<h2>Zambia</h2>Changes in Property Taxes:<ul><li>Starting on January 1, 2025, the Property Transfer Tax in Zambia increased from 5% to 8%. Additionally, moneylenders and building societies can benefit from tax relief on foreclosed property transfers.</li></ul>Why it matters: These changes will result in increased costs for asset transfers in Zambia but will encourage foreclosures in the property market.

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Renew Capital Legal Brief - February 2025

<h1>African Startup Acts: Catalysts for Innovation and Economic Growth</h1>Across the African continent, there is increased focus and interest in startups as an increasing number of countries recognize them as pivotal drivers of economic growth. Tunisia’s pioneering Startup Act, enacted in 2018, has set a precedent, inspiring nations such as Senegal, Nigeria, and Côte d'Ivoire to adopt similar frameworks.&nbsp;These initiatives, which include tax incentives, simplified administrative processes and financial support, are part of a broader effort to foster local innovation. Currently, countries like Kenya, Zambia, Ethiopia and Ghana are in the process of drafting their versions of a startup law, each striving to strike an optimal balance between harnessing and empowering local talent and attracting global investment.<img src="/uploads/startup_acts_1_5a2b351a11.png"> Source:&nbsp;<a href="https://www.renewcapital.com/">Renew Capital</a><h2>Common Themes</h2>Startup Acts across Africa typically focus on fostering innovation, reducing barriers to entrepreneurship and encouraging economic growth. A closer look at these policies reveals a few key focus areas, including:<ul><li>Streamlining Bureaucratic Processes: A core theme of startup acts is simplifying and accelerating the process of registering and operating businesses. This includes reducing administrative burdens, offering one-stop-shop services and easing the procedures for obtaining permits or licenses.</li><li>Enabling Innovative Corporate Structures: To attract international investors, many of these laws aim to accommodate corporate structures that facilitate the inflow of foreign capital. In some cases, it involves introducing relaxed rules for foreign participation and making the local steps of completing a "corporate flip” seamless. This opens startups to the prospects of (i) accessing foreign investors, (ii) expanding within the continent and (iii) securing clean exits to bigger institutional investors and global companies.</li><li>Incentives and Tax Benefits: Many startup acts offer tax breaks, exemptions or reductions for new businesses to ease their financial burden in the early stages. These benefits often target specific areas like corporate income tax, value-added tax (VAT) and social security contributions.</li><li>Access to Funding and Financial Support: Startups often struggle with securing capital, so some startup acts create mechanisms for funding, including grants, loans and venture capital initiatives. They may also establish government-backed investment funds or incentives to attract private investors.</li><li>Legal Frameworks for Innovation: These acts aim to create a legal environment that supports entrepreneurial risk-taking and innovation. This might include intellectual property protections, support for tech-based businesses or frameworks that promote research and development.</li><li>Facilitating Talent and Workforce Development: Many startup acts emphasize education and skills development to ensure a steady pipeline of talent. This includes fostering entrepreneurship education and supporting training programs for both founders and employees.</li><li>Global Market Integration: Several startup acts aim to connect local startups with international markets by promoting exports, easing cross-border trade and facilitating access to global investors and partners.</li><li>Regulatory Sandbox and Flexibility: Some nations, inspired by global trends, include provisions for regulatory sandboxes—controlled environments where startups can test innovative ideas without immediately facing heavy regulatory restrictions.</li></ul><h2>The African Startup Acts Journey So Far</h2>Let’s take a look at the steps taken by African countries.<ul><li>Algeria: Has not yet implemented a Startup Act, but the&nbsp;<a href="https://www.meritas.org/insight/article/Establishment-and-Promotion-of-Startups-in-Algeria">Algerian Startup Fund (ASF)</a>, launched in October 2020, provides funding for innovative businesses and expanded in 2022 to support startups across all 58 provinces.</li><li>Côte d'Ivoire&nbsp;<a href="https://www.intracen.org/news-and-events/news/the-startup-act-takes-shape-in-cote-divoire#:~:text=Against%20this%20backdrop%2C%20the%20Startup,favourable%20legislative%20and%20regulatory%20framework.">adopted a Startup Act</a> in November 2023.</li><li>Egypt doesn't have a singular, comprehensive startup act like some other African countries but the government has implemented several initiatives and policies aimed at supporting startups and fostering innovation within the ecosystem.</li><li>Ethiopia: The Ethiopian Startup Act, also known as the&nbsp;<a href="https://shega.co/news/ethiopia-to-enact-a-startup-act">Startup Businesses Proclamation</a> has been in draft format for several years and is yet to be officially enacted. Recent feedback dialogues that Renew Capital has participated in indicate formal adoption may come any day.</li><li>Ghana: The Ghanaian Innovation and Startup Bill project is a joint initiative by Ghana’s private sector and the government to enhance the startup ecosystem through co-created legislation. The bill has been drafted but is yet to be ratified.</li><li>Kenya: The National Assembly passed the Startup Bill and it is now awaiting presidential assent to become law. Some&nbsp;<a href="https://www.msn.com/en-us/news/politics/kenya-s-senate-passes-controversial-startup-bill-mandating-r-d-spending-local-ownership/ar-AA1xIrsW">news sources</a> indicate that the startup community is not fully bought into everything that’s in the current draft. One example is the 100% Kenyan ownership requirement, as Kenya’s tech ecosystem owes much of its success to a blend of local expertise and foreign partnerships and investments.</li><li>Morocco: While there have been several initiatives aiming to support startups in Morocco,&nbsp;<a href="https://weetracker.com/2022/05/31/deep-dive-morocco-startup-ecosystem/">there is no official startup act yet</a>. The government is working on it as part of the Morocco Digital 2030 plan.</li><li>Nigeria: The Nigerian Startup Act was&nbsp;<a href="https://kpmg.com/ng/en/home/insights/2022/10/nigerian-startup-act.html">officially signed into law</a> by President Muhammadu Buhari in October 2022.&nbsp;</li><li>Rwanda’s&nbsp;Startup Act was launched in 2021 with the aim of fostering innovation and entrepreneurship in the country. The law is at its final stages of completion.</li><li>Senegal: The Senegalese Startup Act was formalized in 2020 and ratified by President Macky Sall in 2021, paving the way for innovation and encouraging high-growth startups in the country.</li><li>South Africa: While South Africa doesn't have an official startup act yet, there's a strong movement pushing for its establishment, named&nbsp;<a href="https://www.startupact.co.za/">The South Africa Startup Act Movement</a>. This is being championed by a diverse set of founders, investors and policymakers who see the impact this will have in the ecosystem.&nbsp;&nbsp;</li><li>Tanzania: The Tanzanian Startup Policy is under development, aiming to address challenges faced by startups and foster innovation.&nbsp;&nbsp;</li><li>Tunisia: The Tunisian Startup Act, launched in April 2018, was designed to support and foster the&nbsp;<a href="https://startup.gov.tn/en/startup_act/discover">growth of the country's startup ecosystem</a>. In practice, challenges remain—startups struggle with foreign currency restrictions and slow regulatory processes. There’s quiet talk of a potential revamp of the act but nothing is official.</li><li>Uganda: Startup Act Uganda is a&nbsp;<a href="https://www.uncdf.org/article/8206/doing-more-together-the-coming-of-age-of-startup-uganda-as-an-ecosystem-builder">collaborative effort</a> between the Ugandan tech startup ecosystem, Private Sector Foundation Uganda (PSFU) and Mastercard Foundation. It is still under discussion and hasn't been drafted yet.</li><li>Zambia: A startup bill is under development by the government, focusing on creating a supportive environment for innovation and entrepreneurial ventures.&nbsp;</li></ul><h2>The Big Picture&nbsp;</h2>The proliferation of startup acts across Africa signifies a shift towards nurturing homegrown innovation and entrepreneurship. As nations like Kenya, Zambia, Ethiopia and Ghana work diligently to craft and implement their own startup legislations, we hope they will collectively contribute to a more conducive environment for startups to thrive.&nbsp;

Startup Acts across Africa typically focus on fostering innovation, reducing barriers to entrepreneurship and encouraging economic growth. 

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African Startup Acts: Catalysts for Innovation and Economic Growth

<h1>Press Release: Power Financial Wellness Puts Financial Control Back in Workers’ Hands</h1>Renew Capital invests in Power Financial Wellness, a platform providing workers with the tools to manage their finances effectively.<a href="https://latest-api.renewcapital.com/uploads/FINAL_Power_Wellness_Financial_Press_Release_10c740a9c0.pdf" target="_blank" rel="noopener noreferrer">Download Full Press Release&nbsp;</a>NAIROBI, Kenya,&nbsp;December 26, 2024 – Power Financial Wellness is helping workers across Africa to better manage their money. The fintech company, with customers or subsidiaries in Kenya, Uganda, Tanzania, Zambia, Rwanda and India, offers an all-inclusive financial platform that helps workers in both formal and informal sectors to improve their financial health. The company works directly with employers and gig platforms to provide their workforce with access to financial tools that reduce financial-related stress and boost productivity. Power also provides its Platform as a Service to other regulated banks, lenders, SACCOS and HR platforms looking to digitize or embed financial services.<figure class="image"><img src="/uploads/Power_Financial_Wellness_4794de2d57.jpg"></figure>The fully digital platform provides workers with a range of services to improve financial health. These services include earned wage access, which enables workers to access a portion of their earnings before the end of the month to avoid predatory lending. The platform also offers savings and investment options, longer-term loans and insurance premium financing that supports workers enrolling in health, funeral and other essential insurances. All of these services are seamlessly integrated into workers’ income streams, which makes the financial management process simple and stress-free.“We believe in empowering individuals by giving them access to tools that enable them to pay, save, borrow and protect their financial health,” said&nbsp;<a href="https://www.linkedin.com/in/brian-corey-dempsey/">Brian Dempsey</a>, founder of Power Financial Wellness. “By linking these services directly to their earnings, we provide a frictionless way for individuals to manage their finances, reduce stress and take control of their financial future.”Power provides a financial wellness ecosystem where workers have the resources and guidance to improve their financial health and access the services they need in one place. Their solution is designed to not only support day-to-day financial needs but also provide long-term financial stability and growth opportunities for workers in both formal and informal sectors.“Power Financial Wellness is addressing a critical need in both the formal and informal economies,” said Esther Mwikali, senior investment manager at Renew Capital. “Their platform offers a comprehensive, easy-to-use solution that empowers workers to manage their finances, access savings and loans and protect their future. We are committed to continue backing growth-oriented founders across the continent.”Support to Renew Capital portfolio companies is provided in partnership with Global Affairs Canada.About Power Financial WellnessPower Financial Wellness empowers workers across Africa with tools to manage their finances, improve financial health and achieve long-term stability through an all-in-one platform. Visit&nbsp;<a href="https://yourpower.io/">https://yourpower.io/</a> for more information.&nbsp;

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Power Financial Wellness empowers workers across Africa with tools to manage their finances, improve financial health and achieve long-term stability through an all-in-one platform.

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Power Finance Wellness.avif

Renew Capital invests in Power Financial Wellness, a platform providing workers with the tools to manage their finances effectively.

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Press Release: Power Financial Wellness Puts Financial Control Back in Workers’ Hands

<h1>Why I Say No to Holiday Party Pitches: The VC Model Explained</h1>I’m no&nbsp;<a href="https://www.youtube.com/watch?v=0uMfatiUdqo">Buddy the Elf</a>, but I enjoy a good Christmas party. The decorations, the holiday sweaters and the spiked egg nog. It’s all great in my book.So, given my general enthusiasm for holiday cheer, I hope this won’t come off as a Mr. Grinch moment.<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeBWkRNl6qQGDOG327OVkWMJvm15mW6P07DS5iDEjhmZeky_y99TX7pVAQGif2bSuAucWwufiDranUW7MwWrbOO95PULQe0LukE_NlKQi9ADpkJkwd4sBv-YwfLUZMq0qbKZg2A5xZ1FD-DXqAYTNs?key=rz7TkrBy_rsMUWlGE5ZSRaMu">Photo:&nbsp;<a href="https://unsplash.com/photos/a-red-cup-of-coffee-sitting-on-top-of-a-wooden-shelf-u1JqmWkKfSQ">Eggnog by Katie Azi_Unsplash</a>Ever since I joined&nbsp;<a href="http://www.renewcapital.com">Renew Capital</a>, an early-stage venture capital firm in Africa a couple of years ago, a few drinks into almost every holiday gathering, someone—without fail—will come up to me and ask, “Do you want to invest in my business?”So I listen to them describe how they really need outside investment to help their business grow. The passion in these ad-hoc pitch moments is invariably impressive and though I usually think it’s a wonderful business, my reply is almost always, “No, sorry — I won’t invest in your business.”These entrepreneurs sometimes look a little heartbroken, but as long as the eggnog wasn’t really spiked, I try to explain, usually saying something along the lines of the following:I work for a venture capital (VC) firm. VC is built on the idea that investors make an outsized amount of their returns from a very small number of their investments.&nbsp; Hence, every deal we make needs to have the potential to be a huge success. Love it or hate it, this is the "<a href="https://medium.com/leadership-prevails/understanding-the-vc-power-law-why-fund-size-matters-in-venture-capital-returns-b3dcc2681509">VC model</a>."<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe70qG8vXaypVuvKoqLiwML2WwcLIKBy_JS8DeodXleG7vcJiHO5hPKzZW9Yd3AyeT98J5xq_SNWKeF_ACybIsTskOqkpCx4bRASy8sghajR1AINI7R8pDZTiV73P0_loM9yPQzbSS0U5EObpd2s9w?key=rz7TkrBy_rsMUWlGE5ZSRaMu">Photo:&nbsp;<a href="https://www.linkedin.com/in/lucas381/">Lucas Robinson</a>For the VC model to work, we need companies that are either creating or working in a huge market, with the&nbsp;<a href="https://www.investopedia.com/terms/v/venturecapitalist.asp">potential to capture a sizable share of it.</a> In practice, that means that we seek companies with the potential to expand beyond their current countries of operation (i.e. not entirely focused on dominating one country). What does that really mean? Bluntly, we’re looking for companies targeting total addressable market sizes of more than a billion dollars in Africa.We also look for companies that are trying to solve seemingly intractable problems, often through the clever use of technology, removing the considerable friction that exists in most markets. This means we, like most VC firms, have a preference for fintech, e-commerce, SaaS, trade/logi-tech and mobile-first solutions.&nbsp;Can all of Africa’s problems be solved through these technologies? Of course not, but these technologies enable companies to scale quickly and at the risk of sounding like a catchy&nbsp;<a href="https://youtu.be/aAkMkVFwAoo?si=grG_5S4CnaaAbVK4">Mariah Carey Christmas song</a>, that’s what we are looking for.Is this model right for every company? Definitely not. The economic backbone of every single economy on the planet&nbsp;are the hundreds of thousands of small- and medium-sized businesses (SMEs) that are slowly and steadily increasing their revenue every year. These are fantastic companies. I want there to be hundreds and thousands more of them. I’ve even helped to build a few here on the continent and I’m really proud of them. But they are not (or were not, in some cases) VC-backable companies.Many solid SMEs and even some multinational companies grow without taking any kind of outside capital initially—they find ways to grow a business without (Mailchimp, Basecamp and Zoho are three such examples).Despite the frothy VC market in my adopted hometown of Nairobi, there are actually many other investment options to consider: impact investors, debt, local angel investors, revenue-based financing, working capital facilities, private equity (or micro-private equity) and even grants. Each of these is probably a better financing option for most of the business owners that I speak to.Does that mean I will try to avoid conversations about your new business plans when I see you at the holiday party? Of course not—I love those conversations. It's just that as a VC firm, we may not be&nbsp;<a href="https://www.weareuncapped.com/eu/blog/small-business-finance">the right capital for you</a>.If you're a growth-oriented founder leading an early-stage startup in Africa, apply to our&nbsp;<a href="https://venturelab.renewcapital.com/">Renew Venture Lab</a> to gain training and support. We look forward to learning more about your startup.Lucas Robinson has invested in, founded and run numerous businesses in Africa. He is a Principal at Renew Capital. One of the company’s training topics is focused on this very subject;&nbsp;<a href="https://share.hsforms.com/1vl4AMMceRsW3JTrqjT-LAAee4rj">sign up here</a>.

We seek companies with the potential to expand beyond their current countries of operation (i.e. not entirely focused on dominating one country). 