<h1 style="text-align:center;">The Rise of Private Equity in East Africa</h1>&nbsp;CURRENT STATE OF PE IN EAST AFRICAAccording to the African Private Equity and Venture Capital Association, there were reportedly&nbsp;158 private&nbsp;equity transactions in the East African&nbsp;<figure class="image image-style-align-center image_resized" style="width:29.76%;"><a href="http://www.avca-africa.org/media/1314/avca-spotlight-on-east-africa-private-equity-public-version.pdf"><img src="/uploads/avca_infographic_0_51f293adde.png"></a></figure>region between 2007 and 2014, totaling approximately $1.5B (1). Now, with Ethiopia being the second most populous country on the continent with over 95 million people, one would expect for the majority of the capital to have been deployed to this country. Unfortunately, Ethiopia still has a ways to go. Only 4% of said 158 deals completed in the region took place in Ethiopia, accounting for only 7% of the impact capital distributed (see <a href="http://www.avca-africa.org/media/1314/avca-spotlight-on-east-africa-private-equity-public-version.pdf">figure</a> to the right) (2). Kenya, with less than half Ethiopia’s population, has attracted the majority of private equity transactions and has become known as the private equity hub of the region. In addition, according to the Global Impact Investing Network’s 2015 impact investing report on East Africa, “Ethiopia’s financial services sector - and particularly the financing options available to small and medium enterprises (SMEs) - lags that of other major East African economies” (3).While it seems Ethiopia may have been receiving the short end of the stick in recent years, many in the investing world believe this will soon be changing.FUTURE STATE OF PE IN ETHIOPIA:There are several reasons why Ethiopia is becoming a rising star in the region, one being the country’s double-digit gross domestic product (GDP) growth rate over the past ten years, which is expected to continue over the next five years (4).In line with Ethiopia’s economic growth, the country’s population is expected to continue to increase. If economic output advances faster than population growth, the country will see a broadening of its middle class. As real / disposable incomes rise, demand for higher quality goods and services will rise and the private sector will respond and compete for customers. The good news is that there are plenty of driven and professional Ethiopian entrepreneurs who are more than ready to meet this growing domestic and international demand by providing local value-chain addition across various industries.The Ethiopian government is in favor of this new industry and has thrown its support and weight behind the small to medium sized enterprises that, with the right partners, could become the market leaders of tomorrow. The government’s Growth and Transformation Plan II seeks to make Ethiopia a lower-middle income country by 2025 through rapid (double-digit) economic growth, industrialization and structural transformation (5). The two pillars that will drive this major development will be manufacturing and agriculture.Ethiopia is home to many promising investment opportunities in both of these key sectors, among several others, a fact that is not lost on international private equity investors. The agriculture industry is ripe with investment opportunities in major commodities such as coffee, honey, teff, sesame, flowers and livestock. And the manufacturing industry is just as plush with its ever growing market for fast moving consumer goods, textiles, etc. In fact, in 2014 a major private equity firm - KKR - invested $220M into an Ethiopian rose farm. While large deals by private equity firms and institutional investors are important and vital to the country’s continued growth, they unfortunately do not address the important issue raised before - Ethiopia remains one of the most capital constrained economies in the region for SMEs.&nbsp;CUE THE RISE OF THE GLOBAL IMPACT ANGEL INVESTOR.High net worth individuals (HNIs) across the United States are looking to engage their personal wealth in ways that are different from the typical financial portfolio or fund. High impact (and at times higher risk) investments in frontier economies, such as Ethiopia, are increasingly becoming an important part of said investors’ financial goals. The reason? Investing in SMEs located in developing countries can provide investors with a double or even triple bottom line - financial returns, positive social impact and positive environmental impact. Every dollar invested has the potential to not only provide the company with the ability to scale, but also create jobs in the local community, pay workers a better wage, provide employees with healthcare, pay taxes, and so much more. Impact investing essentially combines the best elements of philanthropy and traditional investing.Operating under the philosophy of “doing well, by doing good”, many governments and NGOs are seeing impact investing as the long-term development solution for emerging economies, as it sustainably contributes towards a country’s economic growth. In lieu of giving a hand out, investors and development organizations can, together, give these countries a hand up - empowering them to take over their own development stories.<figure class="image"><img src="../../sites/default/files/pe_blog.jpg"></figure>Investors should not discount the challenges that these frontier markets possess though - in many instances, it’s still very much the Wild West. RENEW believes that every investor needs to talk with their financial advisors before considering making such investments and should work with a trusted in-country partner. Whether it is large institutional players or boutique investment firms, Western investors can find investment professionals working out of offices in Addis Ababa, Nairobi and Accra. In Ethiopia, where RENEW has an office, we offer our angel investors a full, turnkey, in-country investment service through our Impact Angel Network. And, while Ethiopia trails Kenya’s in private equity, we believe the country will soon be changing that story as well. In fact, we are already seeing progress! In just four years, the Impact Angel Network has closed seven investments and we are gearing up for another strong year in 2016.(1) <a href="http://www.avca-africa.org/media/1314/avca-spotlight-on-east-africa-private-equity-public-version.pdf">African Venture Capital and Private Equity Association: Spotlight on East Africa Private Equity</a> (2) <a href="http://www.avca-africa.org/media/1314/avca-spotlight-on-east-africa-private-equity-public-version.pdf">id.</a> (3) <a href="https://thegiin.org/assets/documents/pub/East Africa Landscape Study/09Ethiopia_GIIN_eastafrica_DIGITAL.pdf">The Global Impact Investing Network: The Landscape for Impact Investing in East Africa</a> (4) <a href="https://thegiin.org/assets/documents/pub/East Africa Landscape Study/09Ethiopia_GIIN_eastafrica_DIGITAL.pdf">id.</a> (5) <a href="https://www.africaintelligence.com/c/dc/LOI/1415/GTP-II.pdf">Africa Intelligence: The Federal Democratic Republic of Ethiopia, Second Growth and Transformation Plan</a>

The RENEW teams take a closer look at the current state and future state of private equity in Ethiopia.

img_7226_1.jpg

The Rise of Private Equity in East Africa

<h1 style="text-align:center;">RENEW Participates at the Wharton Club Africa 2016 Investment Summit</h1>Last week, the Wharton Club of Africa hosted the 2016 Investment Summit and CEO forum in Addis Ababa, Ethiopia. According to the WCA’s website, the event is a “premiere, global, and high impact Pan-African Executive Investment Summit” that features over 100 of the continent’s top investors, wealth managers, family offices and investors from 35 countries from across the globe.*Matt Davis, CEO of RENEW, joined Africa’s “leading regional and international investors, executive game-changers, Ministers, industry titans, and award-winning entrepreneurs” with the goal of brainstorming, collaborating and delivering “game-changing” industry intelligence on investing, investment operations, financial returns, business leadership and development on the continent.*<figure class="image image_resized" style="width:98.76%;"><img src="/uploads/wca_6954a77b6f.jpg"></figure>The following are Matt’s takeaways from his time at the event and as a speaker on the entrepreneurial leadership and impact investing panel:• I was impressed with the audience and speakers that the event attracted, which was a mix of investors and business people all interested or experienced in doing business and investing in Africa.• The chemistry on our panel was great thanks to: 1) a diverse group of people with different philosophies about impact investing, 2) people who have actually invested on the continent, and 3) a great facilitator who had deep experience in the impact investment industry and knew how to steer the discussion.• We also had a good audience that asked interesting questions: the most memorable being whether we had any investors reject a deal because the financial returns were too high - the audience member was working with an office that had rejected a deal on these grounds and they wondered if this was common. My response was that I personally had never experienced such a situation, nor had I heard of any investor rejecting an investment on the grounds that the financial returns were too high; however, this is an interesting problem in the impact investment space. As capital comes from a variety of sources (foundations, donor advised funds, private investment accounts, etc.) unique criteria arise that traditional investment managers may have not encountered before.• I emphasized that those in the industry should be open to a wide range of definitions about impact investing, because the space needs to grow and mature. But, investors and their managers should still be clear about how they individually define their impact investment philosophy and approach.• And, while a broad approach at the moment is appropriate, I also encouraged investors and managers to remember that in the end, impact investing is investing and needs to deliver a financial return. If the industry, which is garnering a lot of attention as of late, goes too long without these returns, we may see a correction; like what happened with the microfinance industry.• I ended by saying that RENEW is more keen on Africa's economic prospects - specifically Ethiopia – versus the broader growth of the impact investment space. In the end, for RENEW and our investors, impact investing is filling a gap in financial markets in countries like Ethiopia, between microfinance and larger private equity, and addressing the problem of the “missing middle”.Overall, I enjoyed the event and hearing the various perspectives from the fellow panelists. A special thanks to Aubrey Hruby, who chaired the panel. Aubrey is the Co-Founder of the Africa Expert Network. And to Lisa Lambie, who organized the whole conference.*<a href="http://www.wcaexecsummit2016.com/why-unique.html">WCA Executive Investment Summit &amp; CEO Forum 2016</a>

Partner Matt Davis speaks on an entrepreneurial leadership and impact investing panel.

wca.jpg

RENEW Participates at the Wharton Club Africa 2016 Investment Summit

<h1 style="text-align:center;">Mama Fresh Opens New Teff and Injera Learning Center in Ethiopia</h1><figure class="image image-style-align-left image_resized" style="width:21.87%;"><img src="/uploads/mftc_logo_tm_1_c24c612c9f.png"></figure>Mama Fresh is excited to announce the soft opening of its <a href="http://www.mama-fresh.com/visit/">Teff and Injera Learning Center</a> at its Addis Ababa export facility. Mama Fresh aims to make the entire world fall in love with Ethiopian cuisine by providing a wonderful educational and cultural experience that is great for the whole family.For those who are unfamiliar with this ancient and nutrient-rich grain, teff is naturally gluten free, native to Ethiopia and is an integral part of the Ethiopian diet. Teff can be eaten in a variety of ways, including being used as the main ingredient in the Ethiopian staple bread product, <a href="http://www.cnn.com/videos/world/2015/12/14/spc-marketplace-africa-teff-a.cnn">injera</a>. To make injera, teff grain is first ground into flour, then combined with water, allowed to ferment over several days, and finally baked into a spongy, unique and sourdough-like flatbread that is enjoyed with other meats and spices at every meal.Mama Fresh is the country’s largest commercial manufacturer and exporter of fresh-baked injera. Because teff is so vital to this country’s economy, Visitor Center guests will start experiencing the grain’s most famous output - injera - through the various stages of production. From teff grain and flour, to injera dough and baking. Visitors will also have a chance to bake their own piece of injera! Trust us, it’s harder than it looks.&nbsp;So the next time you find yourself in Ethiopia, be sure to stop by Mama Fresh to experience teff and injera like you’ve never before.Hours: Thursday to Saturday, 10 AM to 4 PM, by appointment only. Location: Wolo Sefer across from the Wongelawit Building (near to the Gotera intersection on Ethio-China Road). For Appointments: +251 (0) 93 001 3713&nbsp;

The portfolio company is excited to announce the soft launch of its Addis Ababa visitor’s center.

dsc_0548.jpg

Mama Fresh Opens New Teff and Injera Learning Center in Ethiopia

<figure class="image image-style-align-center image_resized" style="width:52.3%;"><img src="/uploads/etat_feb_26_to_mar_4_2012_069_1_dbba254f5c.jpg"></figure><h1 style="text-align:center;">10 Things You Should Know About Ethiopia’s Business Environment</h1>The World Bank recently published its <a href="http://www.enterprisesurveys.org/data/exploreeconomies/2015/Ethiopia">2015 Enterprise Survey</a> on Ethiopia, which outlines some very interesting information about the biggest obstacles private sector companies face in Ethiopia. The survey summarizes “key factual indicators at the country and regional levels” for twelve business environment categories, including: corruption, crime, finance, firm characteristics, gender, informality, infrastructure, innovation and technology, performance, regulations and taxes, trade and workforce.*The RENEW team compiled 10 takeaways. We mainly focused our analysis on the outliers – indicators that were significantly&nbsp;different in Ethiopia as compared with the sub-Saharan Africa (SSA) region as a whole.1. Access to finance is the number one obstacle for Ethiopian firms: The World Bank asked 848 companies in Ethiopia to rank the most prevalent obstacles that they face while doing business in Ethiopia. From the list of 15 common obstacles presented, access to finance was identified as number one. This comes as no surprise. Ethiopia’s current financial services sector, like that in many developing economies, is simply not equipped to provide adequate financing options for growing small to medium sized enterprises (SMEs), which in turn creates a “missing middle” in the country’s economy. The good news is that companies like RENEW and the Impact Angel Network are stepping in to help <a href="http://www.forbes.com/sites/devinthorpe/2016/01/13/impact-investor-in-ethiopia-fills-financing-gap/#64f4de8e50b3">fill this financing gap</a> through private equity investments.2. Customs and foreign exchange are constraining growth: While it takes on average 19.2 days to clear import from customs, about 3 days longer than the SSA region’s average, the proportion of inputs and/or supplies that are of domestic origin are significantly higher than SSA - 82.5% versus 66.1%. This may be a result of forex issues and protectionist trade policies.3. Regulations and taxes are not as bad as we think: RENEW was surprised to find that, although the amount of time senior management spends dealing with the requirements of government regulations in Ethiopia is higher than that of SSA (11.9% versus 7.6%), the remaining indicators are all lower. Examples include the number of days it takes to acquire an operating license (5.4 versus 19.1), number of visits required to meet with tax officials (1.6 versus 2.2), the percentage of firms identifying tax rates as a major constraint (22.8% versus 33.2%).4. Productivity is low but growth is high: While capacity utilization and labor productivity are lower in Ethiopia than the SSA region, real sales and labor growth rates are higher. We see this as a good sign, since productivity can be can be improved with stronger management systems and training, along with investments in better technology and capital goods; both of which RENEW and the IAN address through our investments and portfolio management.5. International certifications could be a source of competitive advantage: Ethiopian firms are not doing well with gaining international quality certifications as compared to the SSA region: 4.3% versus 14.7%. This is another area where foreign investors assist Ethiopian companies in achieving the next level of business and economic development.6. Firms need more electricity and faster access to the grid: Generator use is much higher in Ethiopia than SSA (48.9% versus 26.5%), which is to be expected given that the country is quickly industrializing but in need of more power. In fact, electricity was listed as the second highest obstacle that firms face in Ethiopia. It takes companies 194.3 days to obtain an electrical connection upon application, versus the 33.0 days for the rest of SSA. On a positive note, roads are better in Ethiopia, which shows in the survey’s last indicator: percentage of firms identifying transportation as a major constraint is 8.3% versus 22.8% for the SSA region.7. Firms need to hire more women executives – especially CFOs(RENEW’s opinion): One indicator that stuck out to us is that only 4.5% of firms in Ethiopia have a female top manager. And while the country did better in other gender indicators than SSA, RENEW’s takeaway from the entire Gender section of the survey is that we, as outside investors, need to encourage Ethiopian companies to hire qualified women into senior management positions.8. Ethiopia’s business environment is still closed: The proportion of private domestic ownership in a firm versus the private foreign ownership in a firm (95.9% versus 3.8%) shows that RENEW and the IAN are part of a very small percentage of foreign investors doing business in Ethiopia. Private equity investment is still very much an unknown concept to business owners, an issue that RENEW sets out to address in each of the <a href="../2015/why-are-angel-investors-important.html">trainings</a> we provide on financing options to entrepreneurs, banks and government employees.9. Firms could leverage foreign investors as a source of capital: If you have a free moment, this is the section of the survey to spend some time on. To RENEW, all of the indicators point to a "financial anemia" of sorts. The main indicators that stood out to us concern how and where investments come from: 83.3% of investments were financed internally, versus 7.8% financed by banks, 0.3% financed by supplier credit, or 0.8% financed by equity of stock sales. Only 16.4% of firms in Ethiopia use banks for working capital loans, in comparison to the 21.8% of companies in SSA.10. Yes, there's corruption; but not as bad as some: While it is evident that corruption still occurs in Ethiopia, the survey’s indicators demonstrate that Ethiopia is doing better than the SSA region as a whole.Overall, we are encouraged by these survey results and remain bullish on Ethiopia.*<a href="http://www.enterprisesurveys.org/data/exploreeconomies/2015/Ethiopia">World Bank 2015 Enterprise Survey on Ethiopia</a>

RENEW analyzes the World Bank’s recent survey on Ethiopian enterprise and finds some surprises.

etat_-_feb_26_to_mar_4_2012-069_1.jpg

10 Things You Should Know About Ethiopia’s Business Environment

<h1 style="text-align:center;">A Weekend of Connections, Discussion and Positive Impact</h1>This past weekend, members of the Impact Angel Network (IAN) and distinguished guests met in Washington, D.C. for the second annual National Gathering, which was filled with introductions, connections, and meaningful discussion on how conscious capitalists can change how the West views Africa.The weekend event commenced on Friday evening with a dinner and discussion at the Cosmos Club. Guests mingled and enjoyed cocktails in the East Garden, and then moved into the Club's Warne Ballroom to hear global economist, New York Times bestselling author and TEDTalk speaker - <a href="http://dambisamoyo.com/">Dr. Dambisa Moyo</a> - shared insights on investing, opportunities and major economic shifts that are occurring in developing markets, like Ethiopia.<figure class="image"><img src="/uploads/2nd_annual_national_gathering3_6679e06676.jpg"></figure>In line with the weekend’s theme of sharing real stories of impact, entrepreneurship and innovation, the evening continued as members and guests alike shared their personal stories and experiences with impact investing, development, and Ethiopia (<a href="https://twitter.com/hashtag/whatsyourstory">#WhatsYourStory</a>). Ambassador Girma Birru opened dinner, encouraging attendees to continue seeing the economic growth potential that SMEs have in Ethiopia. Hussein Hirji, Economic Counselor of the Canadian Embassy, spoke to the unique public-private model that Global Affairs Canada is implementing in Ethiopia in partnership with RENEW.The night concluded with Miraf Hailu, deputy-manager of <a href="http://www.mama-fresh.com/">Mama Fresh Injera</a>, sharing about the beginning of RENEW and the IAN’s relationship with the company and just how far they’ve come. Starting in an outdated bakery to becoming a leading injera export manufacturing facility that is positively impacting the local community through job creation and tax revenue. It was a truly inspiring story of growth, opportunity and impact!On Saturday morning, IAN Chapter Chair David Grizzle and his wife Anne hosted network members for a morning of learning and review. RENEW went over the current status of each of the IAN portfolio companies including progress made to date, challenges and opportunities, and the plans going forward. All members participated in a lively discussion to brainstorm ideas on how the IAN can add more value to our portfolio. Guests were given a little taste of Ethiopia by participating in a traditional Ethiopian coffee ceremony.The weekend concluded with the investment pipeline dinner, hosted by IAN Chapter Chair, Dr. Andrew Umhau and his wife Cary. During this relaxed evening of community and fellowship, the RENEW team provided important updates on the network's investment pipeline, while guests were able to sample some Mama Fresh’s delicious Ethiopian cuisine - truly, home cooking at its finest!The RENEW team would like to thank Dr. Dambisa Moyo, Ambassador Girma Birru, and the <a href="https://renewcapital.com/impact-angel-network/advisory-board">IAN advisory board chairs</a>, Dr. Andrew Umhau, David Grizzle, Jeff and Donna Turi, Alan Gardner, Beth and Joel Marquette and Jodi Morris, and the staff of the Cosmos Club for helping deliver an unforgettable event. We also thank the members of the IAN and their families for coming to D.C. for a memorable fall weekend.

RENEW and the Impact Angel Network host the second annual National Gathering.

2nd_annual_national_gathering3.jpg

A Weekend of Connections, Discussion and Positive Impact

<h1 style="text-align:center;">Africa: The Final Frontier</h1>Before arriving in Ethiopia, my only interaction with Africa was largely related to researching some macro numbers or hearing stories from other people who had traveled to the continent as a tourist or as a volunteer. Moreover, the media portrays stereotypical images of Africa, either showing a lone acacia tree (as pointed out by <a href="https://twitter.com/SimonMStevens/status/464049317926686720">Simon Stevens</a> on Twitter) or poverty without showing a balanced view of economic growth. These stereotypes reinforce that Africa is a country and not a continent with as varied fundamentals as in Europe. When <a href="http://qz.com/207527/the-reason-every-book-about-africa-has-the-same-cover-and-its-not-pretty/">Michael Silverberg</a> (a writer at Quartz) asked Peter Mendelsund (an associate art director of Knopf and a gifted cover designer) about the prevalence of Acacia tree on each book cover about Africa, he pointed out laziness, which is both individual and institutionalized. He further mentioned that most American book designers tend not to know all that much about the rest of the world and that is why they resort to visual clichés. Risk-averse marketing departments further reinforce these clichés.<figure class="image"><img src="/uploads/book_covers_4317018a62.png"></figure>Unfortunately, these stereotypes prevail in investing too as media puts the entirety of Africa in one basket without recognizing the differences among countries. In the new world order, where Central Banks all over the globe are printing money, it has become more imperative to search for yields in all places, which essentially means turning over more stones while controlling for popular biases. I believe the best philosophy of investing in Africa comes from a fictional character of Captain James T. Kirk of Starship Enterprises instead from a popular investor. Just replace “Space” with “Africa” and you can understand the differences and nuances of investing in African countries.“Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”I believe that RENEW’s modus operandi resembles Captain Kirk’s statement. Instead of being based in Washington DC and occasionally visiting Ethiopia, RENEW has boots on the ground; employees who turn over many stones to find ideas while increasing the probability that the investment opportunity RENEW decides upon is actually promising and will turn out to be good. Based on my prior work in emerging and developed economies at multiple private and public equity funds, I learned the lesson to invest the same amount of time you spend looking at the Google’s and Apple’s of the world as you do with promising ideas in other countries — and no matter what you’re looking at, keep just a few in your nest to gain diversification and thus Ethiopia.Ethiopia’s situation is as different from many other countries in sub-Saharan Africa as a comparison between an apple and a sheep. Africa’s big four are grappling with cheap oil, political uncertainty, depreciating currency and weak banks but that is as unrelated with Ethiopia as my previous comparison. Ethiopia shares the same continent with other problem countries and probably some problems too, but the country has different fundamentals than South Africa, Nigeria, Angola or Kenya. South Africa is set to grow by just 0.6% this year (source: IMF) with a currency that plummeted 30% last year as well as an ongoing political turmoil.* Nigeria is buckling under the low oil price as it relies on oil for 70% of government revenue and accounts for 90% of export revenue.* Angola is another victim of oil prices as it relies on oil for 95% of its government revenue.* Ethiopia’s neighbor, Kenya is relatively more resilient and diversified but has been facing troubles in its banking sector; the country has 43 banks, most of which have overstated profits and are facing the weight of non-performing loans combined with a big fall in deposits.* Although Ethiopia has its own set of troubles, none of them require relying on a commodity that fuels a significant part of its state budget. Real economic growth is projected at 7% between 2016 and 2025, which, according to the IMF, is due to Ethiopia’s heavy public investment into priority sectors such as infrastructure, agriculture, and manufacturing.** Moreover, strict capital controls support Ethiopia Birr’s value. I believe these are some of the factors that made me buy that one-way ticket to Addis Ababa.<figure class="image"><img src="/uploads/prasoons_blog_e20f3a6d40.jpg"></figure>As a stereotypical investment professional, when I saw the job posting by RENEW, I researched Ethiopia’s macro indicators first before pressing the “send” button. I could sense a similar pattern as I noticed in a few emerging markets' growth stories. I saw a fast-growing frontier economy with an emerging middle-class and a young population that demands products and services similar to their counterparts in other emerging markets. Moreover, I could identify with RENEW’s work ethics and decided to join the global team in July 2016. Ethiopia is a regulated economy that is still figuring out its place in the global trade. As the regulatory environment is focusing on cautious growth, Ethiopia’s on the ground situation feels similar to the China or India of two decades ago. The good part is that the country is eager to learn from the growth of other emerging countries and leapfrogging growth without reinventing the wheel. Despite fundamentals and precedents of other countries, the country and a majority of Ethiopian midsize businesses take their own time in figuring things out and move cautiously. I believe that is where RENEW plays a pivotal role in helping management teams and companies grow by considering an outside perspective, which could merge with local conditions to spearhead a potentially high growth sustainable company.I have been enjoying my journey at RENEW and turning many stones with a talented local team to find opportunities that create social and financial returns. Moreover, I can leverage on my prior experience in operations, research, and investing to help businesses in Ethiopia grow. I believe the larger part of work satisfaction come from seeing companies employing more people and building livelihoods. There are many other trends and fundamentals that are worth learning about Ethiopia. I am taking my time to assimilate macro and cultural learning about Ethiopia to help our companies and investors navigate growth in Ethiopia, which I will share in the my next blog.In the meantime, live long and prosper.*CNN Money:<a href="http://money.cnn.com/2016/04/15/news/economy/africa-economy-south-africa-nigeria-kenya-angola/"> Africa's Top 4 Economies Are In Trouble</a> **Deloitte:<a href="https://www2.deloitte.com/content/dam/Deloitte/et/Documents/tax/Economic Outlook 2016 ET.pdf"> Ethiopia Economic Outlook 2016, The Story Behind the Numbers</a>

RENEW's Senior Investment Manager breaks down stereotypes, clichés and outdated perspectives about the continent of Africa.

book_covers.png

Africa: The Final Frontier

<h1 style="text-align:center;">Tebita &amp; WSU: Working Together to Save More Lives</h1>Of the many goals we set out to achieve alongside our portfolio companies and their driven entrepreneurs, such as social impact and financial returns, RENEW and the Impact Angel Network (IAN) also seek to add value to the companies in the form of strategic relationship building.Members of the IAN closed an investment in EAES in May 2015. EAES serves providers of emergency medical services and training in East Africa, Ethiopia in particular, in order to ensure that international and domestic clients have access to reliable, high-quality emergency care. EAES works in partnership with local firms, such as Tebita, by offering business development, procurement, and administrative support. This support drives medical service companies to operate more efficiently and thus, frees them up to focus on their core functions; providing quality medical care for patients in crisis.<figure class="image"><img src="/uploads/desktop20_e32f0440f8.jpg"></figure>EAES and Tebita, together, aim to improve the quality of and access to emergency healthcare services across Ethiopia and beyond. And now, we’re excited to announce that through RENEW and EAES’ business development efforts, Tebita will have a U.S. partner to assist them in the coming years on their journey to becoming a leader in emergency healthcare and response - <a href="http://www.weber.edu/CHP/EthiopiaEMS.html">Weber State University</a>.In July 2016, Bill Robertson, department chair and assistant professor of emergency medicine at Weber State University (WSU), spent a week in Ethiopia accompanied by Lisa Trujillo, director of clinical education in WSU’s Respiratory Therapy Program. Robertson and Trujillo met with the Kibret Abebe (founder of Tebita) and his team, visited the company’s training center and spoke with the deputy director to the Ethiopian Ministry of Health to discuss the future of EMS in Ethiopia.Robertson and Abebe collaborated on how WSU’s emergency care and rescue department could assist Tebita with developing programs that will further the efforts to establish educational and credentialing standards, and to provide a sustainable workforce of qualified emergency medicine providers for Tebita, as well as other agencies in Ethiopia.“With the development of newer educational technologies, and the ever-increasing availability of broad-band internet capabilities in the developing world, we are able to collaborate with areas of the world such as Ethiopia in offering at least the didactic component of medical education,” Robertson said. “The face-to-face component of medical education that is necessary for skills and hands-on training is still a must, but with the ability to lecture from a distance, the time we spend there in person has become much more practical.”As this relationship between WSU and Tebita continues to flourish, so too will the overall quality of emergency medical care in Ethiopia, leading to the prevention of unnecessary deaths and thousands of more lives saved. And that is a success story we all can get behind!

tebitambulance.com

Renew Capital Angels invested in East Africa Emergency Services LTD (EAES), which partners with Tebita Ambulance. The company helps ensure that international and domestic clients have access to reliable, high-quality emergency care in Ethiopia. Tebita is the first private-sector ambulance company in Ethiopia.

Logo_EAES_4dd6dd8c98.png

EAES.avif

A new partnership that will lead to better emergency care in Ethiopia.

wsu_1.jpg

Tebita & WSU: Working Together to Save More Lives

<h1 style="text-align:center;">Building a New Class of Finance Executives for Ethiopia</h1>For years, CEOs in Ethiopia have longed for someone whom they trust to help them understand and manage their company’s financials. Someone who understands the business, can produce and analyze financial reports, and can turn that information into a tool for critical decision-making. Someone who demands quality and timeliness from their team, who can identify risks weeks before they become problems, and make course corrections to avoid cash shortages. Someone who can plan, build budgets and set up systems to control a company’s most critical asset – cash. This someone is a Chief Financial Officer (CFO).It is with this reality in mind that RENEW is pleased to officially announce the launch of an important finance training course, the <a href="../../the-exchange/cfo-100-program.html">CFO 100 Program</a> (CFO 100). The program is offered in partnership with the Association of Chartered Certified Accountant (<a href="http://www.accaglobal.com/us/en.html">ACCA</a>), a vast professional network of more than 188,000 members worldwide. CFO 100 will be hosted at The Exchange, in Galani Cafe Warehouse that is the focal point of the Accelerating Business Growth project, an investment program in Ethiopia that is undertaken with the financial support of Global Affairs Canada.<figure class="image"><img src="/uploads/the_exchange_training_copy_6bf1674cc8.jpg"></figure>The two-year, part-time program will bring highly motivated finance executives from local small and medium enterprises (SMEs) through an intensive management-training program. This program will ultimately equip participants with the skills they need to push their companies towards playing a stronger role in the Ethiopian economy by becoming market and industry leaders.CFO 100 has an eight-course curriculum spanning across multiple disciplines that any finance professional would find valuable, including real-world finance skills, technical competence, and the highest level of professional and ethical standards. The first three months include classroom training, followed by a structured self-study program focused on content from ACCA’s curriculum. This combination of self-study material and in-person, classroom training throughout the week makes the program innately flexible, allowing students the time and freedom to continue employment throughout the course of the program.Ultimately, the CFO 100 Program aims to build a new class of finance professionals in Ethiopia with a strong foundation of advanced accounting and real-world financial management skills that will give a participant a career advantage.For more information on the CFO 100 Program application process, eligibility requirements and admissions process, please visit our CFO 100 <a href="../../the-exchange/cfo-100-program.html">web page</a> and <a href="https://renewcapital.com/the-exchange/cfo-100-program-faqs">FAQs</a> page.

The CFO100 program is developing an elite class of high-quality, credible CFO and finance managers across Africa. The CFO100 program provides a strong foundation of advanced accounting and real-world financial management skills to prepare companies to manage investment capital.

test_2x_93d94e941f.jpg

For Finance Professionals

RENEW partners with ACCA to launch innovative CFO 100 Program at The Exchange.

the_exchange_-_training_copy_1_1.jpg

Building a New Class of Finance Executives for Ethiopia

<h1 style="text-align:center;">My Journey of Impact in Ethiopia</h1>Growing up, I don’t remember wishing ‘I want to be a pilot or a doctor’. Being able to fly an airplane or becoming a healing hand is indeed a noble job, and it’s no wonder many children wish to become one. For me, the goal was to lead a balanced and meaningful life, regardless of the career I choose. I grew up in a family that equally emphasized the importance of work, family and friends, and spiritual activities; a philosophy that I wished to continue building in my own life. So when the time came to make a decision in junior high, it was with some concern and a heavy heart that I decided to pursue business school. Would it help me achieve my goal of a balanced and meaningful life? Fast forward 12 years, I am happy to say that it was the right decision, and I would do it all over again.Business school was great, however, it did fall short in preparing me for the real-world challenges after graduation. When I was in my final year, I moonlighted as a sales representative for different companies. One month, I was trying to promote kitchen appliances door-to-door, and the next month I was making hundreds of cold calls to promote a new share company and selling stock. These part-time gigs helped me develop a good work ethic, and helped me understand that the next step after graduation was going to be a hard one. Even so, I honestly thought I would find the perfect job right out the door and be great at it. Little did I know that it would be two years after graduation that I would find a secular career in which I personally believed I could make ‘worthwhile’ contribution.<figure class="image"><img src="/uploads/berke_blog_b2e2a9f649.jpg"></figure>When I started my finance career seven years ago as junior analyst at one of the leading consulting firms in Ethiopia, I was very excited. I helped develop and review more than 100 business plans, advised many entrepreneurs and businesses on developing and improving their feasibility studies, and developed new and attractive opportunities in different value chains. Great work and a great team! However, I always wondered what happened to those businesses after they received their business plans or expansion strategies. Some would go on and use these plans to make their investment decisions, secure bank loans or attract foreign investment. Most remained frustrated because of their inability to attract financing or execute their business strategies properly. I wondered why some seemingly attractive opportunities did not actually attract investment. When private equity firms started opening in Addis, I knew they held the answers to my questions. So, when I was introduced to RENEW, I knew it was time to ask those questions and figure out if I could do anything about it. It was time for a new challenge to uncover the ‘why’ and assess the facts from the other side of the table. I welcomed the opportunity to join the RENEW team as an analyst with great excitement and anticipation. Three years down the road and at the close of my time with RENEW, while I am happy to say that I have found many answers, I did not think the ride would be filled with so many highs and lows.A day at RENEW is no ordinary day. I start reading emails on my way to the office and reply as soon as I open my computer at my desk. Once morning emails are out the door, it is game on. No day is a routine. Some days are filled with just sourcing, cold calls, meetings with new companies, introducing RENEW, running trainings on private equity, and building and maintaining relationships with companies. Other days are spent at the office creating financial models, conducting market analysis, running working sessions with businesses, drafting annual plans, budgets or strategies, board meetings and coaching sessions. The heat turns up at the office during active pipeline meetings, discussing due diligence findings, drafting terms or term sheet negotiations.Before I joined RENEW, Matt Davis did warn me that ‘this is not a 9am to 5pm job”, and he wasn’t kidding. Finding the right company with the right management team is no easy task. As a native Ethiopian, building bridges between the Western way of doing business and the Ethiopian way is a tiring task. It is not just the difference in language, but translating the different cultures, communication styles, expectations and relationship management between the two extremes is an exercise that sometime leaves me breathless. Most days are exciting and I leave office feeling satisfied, and other days are a little frustrating. Not just because of the hard work with our portfolios or would-be portfolios, but also as a result of changes in government regulations and procedures, barriers to closing our investments or delays in processes. But, as one of our investors always says, “if this was easy, everyone would be doing it”. There is a reason why RENEW is only one of a handful of private equity investment firms operating in Ethiopia’s frontier economy.I believe the diversity within the team in terms of background, education, experience, culture and perception has created the right recipe for learning and success at RENEW. Our focus area, private equity, is an exciting industry in the financial sector of Ethiopia. It’s almost an unchartered territory, full of surprises but rewarding. Investing in small businesses and turning business people into real executives is a satisfying process. Our SME private equity trainings are eye openers, and I always enjoy reading the feedback from the participants. The workshops open new understanding and opportunities, a source of finance and growth. Training participants leave full of excitement and hope, determined to come back after developing their investment plans or business strategies and attract equity financing. I am proud that my career in finance has brought me such an opportunity to impact the local economy and to meet and work with hundreds of businesses in Ethiopia.Today, many children still wish to become a pilot or a doctor, and for good reason. And I am fortunate to have friends who are pilots or health professionals, not because they occasionally bring me stuff from abroad or because I visit them when I feel ill, but because they are great friends and they too do their best to lead an impactful and balanced life. And while I didn’t, like my friends, go through five or more years of school and training, I’ve gained important knowledge through my education, formal trainings and from my bosses and colleagues.Applying the principles that I have learned and helping companies change their ‘business as usual’ approach to management, customer service, and excellence; observing companies come out of their shells and position themselves for growth and greatness - that is what I call a rewarding job. The balance between impact and returns on investment is hard to find. Yet, at RENEW, I enjoyed such a great balance, not only between impact and returns but in personal and spiritual activities as well.What’s next? After testing both sides of the private equity market as a business consultant and portfolio analyst, I think it’s time to see from the eyes of the investor or the entrepreneur. I recently made my first small investment in a small business, and I am leading the efforts to promote the business. Who knows, this could be the start of something new, something exciting, impactful and balanced.