<h1 style="text-align:center;">How Big is the Opportunity in Africa??</h1>While the world continues to circle around the question of sustainable development in Africa, moving from aid to investment, the question of scalability continues to pop up; "really how big is the opportunity in Africa?"Kai Krause used a creative graphic representation, something that would go in the <a href="http://www.amazon.com/Visual-Miscellaneum-Colorful-Worlds-Consequential/dp/0061748366">Visual Miscellaneum</a>, to show that Africa has the whole (investment) world, in its hand.<figure class="image"><img src="/uploads/Africa_True_Size_Krause_5f795f21c4.png"></figure>The factors that allowed these "investing" countries to have their own industrial and agricultural revolutions are rapidly assimilating in Africa, fueled by an increasingly sophisticated working class. Any one of these countries has enjoyed success as a world power, economic leader, or established emergent economy throughout time....and ALL of them fit in this ONE continent?Of course there are countervailing factors, but the data speaks for itself -- Africa is huge. So while each of these countries has had centuries to maximize the land they were given, Africa has just begun...

Kai Krause used a creative graphic representation...

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How Big is the Opportunity in Africa??

<h1 style="text-align:center;">Looking to Rwanda</h1> While the US offers many reasons to be thankful and celebrate this holiday season, most agree that the country is not without its share of worries and wonderment. Stimulating the economy weighs heavily this shopping season as U.S. leaders look for solutions. One writer suggests the U.S. look to Rwanda, where the ease of starting a business ranks equal with America according to the World Bank's 2011 rankings.Equal? Yes.Rwanda has enacted a host of incentives and regulatory provisions to keep their projected 7% growth going strong in the new year.Beyond the opportunity to invest and engage the economies of East Africa, maybe the U.S. should look to learn from them too.

...where the ease of starting a business ranks equal with America...

Rwanda

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Looking to Rwanda

<h1 style="text-align:center;">Investing in Unfamiliar Territory</h1>We believe that some of the strongest opportunities for financial growth and social impact currently exist in Africa. Contact us if you would like to define a strategy for investing in emerging African economies. Here are ten reasons to consider investing in Africa:<ul><li>African markets offer among the highest return on investment in the world. Nearly every African stock market index outperformed the S&amp;P 500 over the past three years in U.S. dollar terms—in most cases by a significant margin. A sampling of overall equity market returns in 2006: Botswana +34%, Cote d’Ivoire +17.7%, Ghana +109%, Kenya +18%. (Source: Barron’s</li><li>U.S. investors are behind the curve. According to the World Bank, sub-Saharan Africa’s economic performance over the past five years suggests that it may have achieved a milestone in its quest for sustained growth. Growth averaged 4.0% between 2000 and 2005, compared with less than 1% during the early 1990s. In 2006, GDP expanded by 5.6% in sub-Saharan Africa and is projected to climb to 5.8% through 2008. The Congressional Research Service reports that “the growth seen in the current period is less volatile and more evenly distributed among African countries than in the past.” Yet over half of the $19.6 billion total U.S. investment in this region is in the petroleum sector. Reuters reports that the U.S. is so far behind that it had little presence at a recent meeting of the mobile phone industry group, the GSM Association, to discuss a $50 billion investment in sub-Saharan Africa in the next five years. Many such non-extractive sectors are nearing a tipping point, ready for investment.</li><li>Multinationals are re-assessing Africa. Reuters reports that major U.S. companies watching Africa’s rapidly improving investment climate will be examining ways to increase their activity. Merck &amp; Co, Boeing Co, 3M Co, Cargill, General Motors, Chrysler, Hewlett-Packard and Coca-Cola were among the participants in the 2007 U.S. Africa Business Summit.</li><li>New opportunities are emerging in consumer industries. Brisk demand for the commodities that comprise traditional large-scale foreign investment in Africa—oil, mining, agriculture—is creating secondary opportunities in consumer markets. Banking, telecommunications and tourism are among the sectors receiving a boost; renewable energy has the potential to leapfrog infrastructure obstacles the same way mobile phones have done. (Source: MoneyWeek, Investec Asset Management)</li><li>Information gaps remain, even as investment opportunities multiply. “I think there is a lack of information about the quality of opportunities and potential that continues to exist in Africa within the American business community.” (Robert Mosbacher, President of the U.S. Overseas Private Investment Corporation, speaking to Reuters). Renew aims to bridge those gaps by conducting comprehensive business assessments tailored to the needs of U.S. investors.</li><li>RENEW focuses on areas where experts say African markets can make progress. Experience suggests that fund managers are leery of Africa for two primary reasons: 1) Markets are comparatively very small; 2) Investments are illiquid—it’s too difficult to exit. In their 2007 analysis of African capital markets, experts from the Center for Global Development chart the following path forward:“A long-term strategy for attracting equity investment should concentrate on increasing the supply of available securities—since demand will come naturally through the market. Increasing supply means tackling the barriers of small market and firm size to encourage the growth of more and larger firms on the continent. Solutions to increasing the size and scope of the African private sector must focus on improving the investment climate, reducing the level of risk and uncertainty, and providing greater means for small, indigenous firms to survive and grow.”RENEW mitigates risk, channels needed resources and provides the expertise that will enable promising firms to grow and compete globally.</li><li>The continent is opportunity rich. “Many ideas that have been tested in the developed world, like cell phones, are still novel in Africa. Good business ideas and capable management are [the elements] in short supply. Most institutional investors are still frustrated by the quality of the deals available.” At the same time, few market sectors are saturated with products or teeming with competition, leaving plenty of niches for new ventures. As a result, “differentiated products can command a significant premium.” (Kehinde Oyeleke, executive director of Asset &amp; Resource Management, interviewed by Knowledge@Wharton).</li><li>Africa boasts extraordinary entrepreneurs. Local versions of Apple’s Steve Jobs are changing the playing field throughout Africa by creating enterprises that drive progress. Adenike Ogunlesi built a winning clothing brand by mixing African fabrics with Western styles and fabrics. She’s grown her business to the point where her company, Ruff ‘n’ Tumble, is not only a leader in Nigeria but receives orders from WalMart as well. Ogunlesi managed to scrape together enough capital from friends and family; others like her need access to better options. (Source: Africa Open For Business).</li><li>There is a new generation of African leaders who understand the promise and possibility of business in Africa. Paul Kagame — President of Rwanda and winner of the 2006 and 2007 ICT Africa Award for his innovative use of information and communications technology—has earned the nickname “The Entrepreneur President” for his business and technology-driven plan for Rwanda. Ngozi Okonjo-Iweala, the former Finance Minister of Nigeria and currently a director at the World Bank, emphasizes reform, economic growth and business opportunity. “The best way to serve Africa today is to help Africans stand on their own two feet, to create jobs,” she says. Imagine if Africans did not depend on others to cure their diseases or educate their children. Jobs enable Africans to do these things for themselves. (Source: Forbes, TED Conference)</li><li>The big picture is getting better. Since 2000, more than two-thirds of African countries have had multiparty democratic elections. In the past three years, the average rate of growth on the continent has moved from 2.5% to 5%, better than many of the wealthiest OECD countries. Conflicts in Africa are down from an average of 12 per year a decade ago to three per year today. (Source: World Bank, TED Conference)</li></ul><figure class="image"><img src="/uploads/i_Stock_000005377907_FOR_Proposal_1_38668a1611.jpg"></figure>

We believe that some of the strongest opportunities for financial growth and social impact currently exist in Africa.

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Investing in Unfamiliar Territory

<h1 style="text-align:center;">How the Impact Angel Network Makes Investments in Africa</h1>One of RENEW's core beliefs is that great businesses are at the heart of a healthy economy, and that the best way to make an impact in a developing country is by making an investment. RENEW has created a short, fun, step-by-step overview of how the Impact Angel Network is transforming African economies by investing in growing businesses.<figure class="media"><oembed url="https://youtu.be/5Kly2CJvNkk"></oembed></figure>Contact us at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> or follow us on Twitter @RENEWLLC to find out more.

Transforming African economies by investing in growing businesses.

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How the Impact Angel Network Makes Investments in Africa

<h1 style="text-align:center;">Schedule a Meeting During My Trip to Nairobi and Kigali, January 4 - 15</h1>This update is especially for our Kenyan and Rwandan friends and partners. After what is sure to be a marvelous holiday visiting family outside Nairobi later this month, I will be working out of Nairobi and Kigali January 4 - 15.So if you're in either city during that time and are interested in RENEW's work, know of a business we should list on our Marketplace, or think there's someone I should meet, please do send me an email: jweissburg at renewcapital.com. You can also post any suggestions in the comments area below.During this trip, I will be working to build RENEW's local partnerships and getting to know a variety of individuals and organizations in the Kenyan and Rwandan business sectors.I look forward to hearing from you!

...for our Kenyan and Rwandan friends and partners.

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Schedule a Meeting During My Trip to Nairobi and Kigali, January 4 - 15

<h1 style="text-align:center;">3 Reasons It's Time for Angel Investors to Go Global</h1>Times are changing - Markets around the world are opening up, technology is shrinking 3,000 miles to 30 miles, and angel investing is the new "VC". At RENEW, we think it's time for U.S. angel investors to start going global. Here's why:<figure class="image"><img src="/uploads/renew_banners_connect_grow_1_2296e046e9.jpg"></figure>1. The risk return profile of frontier markets is changing. Small, mid-size and large companies across sub-Saharan Africa are sprouting up to meet growing domestic and international demand. Per the IMF, “the same crucial developments that presaged the arrival of institutional financial investors in emerging markets in the 1980s are taking place in parts of sub-Saharan Africa today—growth is taking off, the private sector is the key driver of that growth.”* Local companies are starved for capital as their financial markets scramble to keep up. This presents a good opportunity for investors to enter into regions where valuations are low. Still, investors must be very cautious. Do your due diligence, partner with people you trust, and know what you are getting into. This is the Wild West.2. Thankfully, frontier markets like Ethiopia, Kenya and Rwanda are more accessible through Western firms that have offices in these countries. 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. This is encouraging news for investors since “sub-Saharan Africa is expected to continue being the second fastest growing region in the world” with growth rates at around 5% in 2014, and expected rates at 5.75% for 2015.**3. You receive two returns. When you invest in an ethically run company a frontier market, you have the chance of making both a financial return and significant social returns. You can receive the same in developed markets, but the dollar does go a lot farther in countries where wages are low. Last year, RENEW's angels created over 500 jobs. Their investments also help stabilize the economy by generating taxes to offset foreign aid, and bring in hard currency to help stabilize inflation.So, when you find yourself looking for that next big thing or an exciting venture to take on, consider joining the ranks of rock stars like <a href="http://blogs.wsj.com/briefly/2015/03/30/why-private-equity-is-moving-into-ethiopia-at-a-glance/">Bob Geldof</a> and war heroes like <a href="http://media.kkr.com/media/media_releasedetail.cfm?ReleaseID=852684">David Petraeus</a>, and invest in frontier markets like Ethiopia.We welcome U.S. angels to participate in the discussion on angels going global at our May 1 National Gathering in Washington, D.C. Please contact a RENEW team member at <a href="mailto:renew@renewcapital.com">renew@renewcapital.com</a> to find out more.

At RENEW, we think it's time for U.S. angel investors to think about going global...

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3 Reasons It's Time for Angel Investors to Go Global

<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.

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The Rise of Private Equity in East Africa

<h1 style="text-align:center;">An Angel Investor's Tour to Ethiopia, Uganda and Rwanda</h1>At the end of January, a longtime member and IAN investor, Dr. Andrew Umhau, joined Matt, Laura and Brooklyn on a regional trip across East Africa to see how the Ethiopia <a href="../../marketplace/portfolio.html">portfolio</a> was doing, meet new companies in Ethiopia and Uganda, and explore Rwanda. It was Dr. Umhau’s first trip back to Addis in over 7 years and a lot has changed since he last visited, including the amount of growth the country has undergone.<figure class="image image_resized" style="width:100%;"><img src="/uploads/img_5912_2_2673dc655f.jpg"></figure>Over the course of the week with RENEW, Andrew was able to visit over 20 different businesses. This included a number of site visits, as well as meetings with partners and entrepreneurs. It was a unique opportunity for him to see some of the businesses his family had invested in, as well as other companies in the RENEW portfolio and in the current pipeline. Visiting RENEW in-country is always a valuable trip and provides a first-hand experience seeing the companies that are discussed on our Monthly Members’ Calls.After a few days in Addis, Andrew and the RENEW partners took off for Kampala, Uganda. Joined by our team member in-country, Mary Adoi, the group had the opportunity to visit with 16 different businesses currently interested in receiving financing. The entrepreneurs in Uganda were eager and excited for the prospect of working with RENEW.<figure class="image image_resized" style="width:100%;"><img src="/uploads/img_6039_2_20d69849ab.jpg"></figure>The last leg of the journey was a stop in Rwanda: an exciting, young country vibrant with businesses. The team agreed there was a lot of growth potential in the country, and were excited by the people and the city of Kigali.Overall, Dr. Umhau experienced first-hand how RENEW works in-country. He had the chance to meet our team on the ground as well as a number of businesses, and he was able to witness some of the training and vibrant community that has been built at the Exchange.<figure class="image"><img src="/uploads/img_6140_3d45539148.jpg"></figure>

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An Angel Investor's Tour to Ethiopia, Uganda and Rwanda

<h1 style="text-align:center;">Econ-Tourism Trips: Where Indiana Jones Meets Warren Buffett</h1>Over the years, I have hosted hundreds of investors in Ethiopia. One would think it could get monotonous, but it never does. More and more, high-net-worth individuals and families are signing up to become impact investors and choosing this as a more sustainable strategy for creating impact in Africa over more traditional charity models. Our role is to help them make good decisions and to oversee their investments on the ground. Our strategy is to find, vet and present the best small and medium enterprises (SMEs) in Africa to our growing network of global change agents, called the Impact Angel Network (IAN). Each investor has a fascinating "journey of impact" that brings them to consider the idea of investing in Africa's future. It's amazing to hear their personal stories as we walk through factories, hear pitches from women-led companies, sit with employees of companies our investors have backed, and drive around the bustling cities of Addis and Kampala.Many trip participants have "aha" moments during these visits and take another step forward in developing a new framework around Africa's economic potential for financial returns and social impact. For me, each trip we host and every story I hear brings me back to the moment I realized the future we must be part of on the continent of Africa is building the private sector. Having investors in town also provides a concentrated time for me to have my own "aha" moments over and over again. The private sector needs to keep pace with the millions of youth that are entering the workforce each year. In Sub-Saharan Africa, more than 60% of the population is under the age of 25, and around 15 to 20 million well-educated young people are expected to join the workforce every year for the next three decades (World Economic Forum, 2017). The private sector needs to grow, and grow fast, and everyone needs to take part in making this happen or all of our efforts will be swept away with rising unemployment rates. But to watch hundreds of workers making things like yogurt, bread, shoelaces, toothpicks, tee-shirts, juice...I have hope. One business at a time, we can create thousands of jobs and a thriving economy.<figure class="image"><img src="/uploads/img_e6341_animation_9d2836eddf.gif"></figure>And there is an exciting upside to this story. By 2025, it is projected that almost two-thirds of the 303 million households in Africa will have discretionary income, an addition of almost 90 million consumers in a decade. This growth is expected to push Africa’s GDP growth from 4.9% to 6.2% in the next 10 years, outpacing the global GDP rate of 3.7% (McKinsey, 2015). Smart investors are seeing the "Made in Africa" brand as the next big thing. Indigenous companies, industrious entrepreneurs, creating products with features that appeal to their domestic markets at a price-point that works with the economy; that's a great opportunity. This both gives me hope and gets me excited as an impact investor.As I walk around the companies we have invested in - I am proud to say I have backed ten companies here in Ethiopia - it's with great pride that I observe the women our companies are employing and know that each one likely supports multiple people in her household and that their living conditions are improving. She's hopefully having better access to clean water, healthcare and education because she has a job.We recently had several members of the Impact Angel Network in Addis Ababa and the time was full of good conversations and observations. During the Econ-Tourism Trip, we saw 4 portfolio and 9 pipeline companies. My partner and husband, Matthew Davis, then took several of them on to Uganda where they spent a day meeting several more companies we are considering for investment.Africa's private sector is the future. We all need to get behind it and play a role in supporting local companies grow into big ones and create millions of jobs to absorb the youth that will be entering the workforce. I encourage you all to come see what is happening here in Africa. Think different. See the future. Grow a company, build a nation and leave a legacy. This is the mission statement of the Impact Angel Network. If you are on a journey to witness firsthand and potentially invest in Africa's economic potential, we invite you to join us in Ethiopia for the next Econ-Tourism Trip October 27 - November 2, 2019.****Please note: Specific investment opportunities are made available only to “accredited investors” after completing the Impact Angel Network registration and onboarding process and following a waiting period.<hr>Sources:World Economic Forum (May 2017). The Future of Jobs and Skills in Africa. Retrieved from: <a href="http://www3.weforum.org/docs/WEF_EGW_FOJ_Africa.pdf">http://www3.weforum.org/docs/WEF_EGW_FOJ_Africa.pdf</a>McKinsey &amp; Company (July 2015). Winning in Africa’s Consumer Market. Retrieved from: <a href="https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/winning-in-africas-consumer-market">https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/winning-in-africas-consumer-market</a>