<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;">Count Down to Uganda</h1> RENEW’s Matt Davis will deploy to Kampala, Uganda in late October, 2008 as the next step in establishing RENEW’s long term presence in East Africa. Over the next months, he will continue to build RENEW’s network in Africa, provide information services to the IAN abroad, establish and test impact investment metrics, source and coordinate opportunities, help grow investments, and work to increase the efficiency with which impact investment capital is deployed to East Africa

RENEW’s Matt Davis will deploy to Kampala, Uganda in late October, 2008...

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Count Down to Uganda

<h1 style="text-align:center;">Developing Critical Thinking Skills</h1>Observations here in Uganda continue to confirm our thoughts about the value addition RENEW offers to businesses in Africa. Our ability to provide management consulting expertise to growing enterprises is not only sought after by our partners, but by the local leaders whose businesses they fund. Many business owners and local executives are desperate for a management-class workforce here in Uganda — managers that understand and apply analytical thinking to solve the many problems that arise daily in the developing world as a business grows. Electricity shuts off, orders change, a machine breaks down or a customer asks for something other than what is exactly on the menu of offerings. When this happens you will almost always see operations and customer service come to a screeching halt. An innovative solution or answer to either fix the problem or meet the needs of a customer is hardly considered and rarely conceived. The result? The hallmarks of “brand Africa” — poor customer service, poor product quality, inefficient operations and missed deadlines.One could argue that part of this problem starts very early in the development of the working class. Local education often requires students to memorize information, including tables and equations. Rarely are students pushed to understand the why and how behind the information they are given. Students are rewarded on standardized exams. There is only one right answer, never partial credit for understanding the logic needed to get to the answer. Years later, these issues show up on the streets of Kampala. It is very common to find ten identical businesses operating side-by-side one another; always eager to replicate, rarely able to innovate.Instilling analytical thinking and problem solving skills in management teams will undoubtedly increase a company’s ability to provide excellent customer service in a world where meeting the needs of each customer can make the difference in a company’s success. These thinking skills can no longer be confined to the front office, but must find their way to the production floor. When this happens, middle management will gradually shift away from acting as task drivers over their staff, to focusing their time on developing ideas and plans for improving numbers, beating targets and developing their employees.But there is a paradox. The answer to “how does an executive instill analytical thinking into middle management?” points to the management systems. The executive and his or her team must move away from putting out daily fires and reinvent the management systems. If this is done properly, you will no longer hear “if you want it done right, you have to do it yourself,” or “when I leave everything stops. I can’t get away,” coming from the front office. A true management system anticipates problems and develops options for middle management to follow in order to meet them. Middle managers become empowered to make decisions, while executives focus on creating and enhancing the systems. Their focus becomes increasing on gaining market share and meeting new customer needs. Analytical thinking doesn’t develop overnight. Entrepreneurs that start successful businesses have it. They must use that thinking to develop systems that allow the managers to operate in an environment that anticipates problems, provides options and allows the business to live. Thus the paradox: like local education, the executive must shift their focus away from providing their staff with the answer, and move toward developing a system that empowers them to choose options given a number of variables.Helping executives to accomplish this shift is RENEW’s passion. More to come…

Observations here in Uganda continue to confirm...

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Developing Critical Thinking Skills

<h1 style="text-align:center;">Company Profile: A Case for Impact Investment</h1>It’s no wonder there’s an air of helplessness that lingers over the streets of Kampala, Uganda. Negative messages abound. One source of these messages comes from an unexpected and unintentional place. At any moment a pedestrian walking along the street can read names like “Save the Children”, “Food for the Hungry” or “Mercy Corps” bannered across the side of white sport utility vehicles as they speed by. These vehicles roam the city and town centers of the roughest parts of the world, carrying people who deliver services to those in dire need. Pedestrians walking to work, teens hawking goods or students waiting patiently for their bus may see these vehicles and think “the people sitting inside are here because we, Africans, need help.” I wonder if these rolling billboards tell them “there’s a problem here, and foreigners have come in to fix it.”The words jump out at you. “Save”, “Feed” and “Mercy.” It’s clear these words originate from a legitimate need for NGOs to ensure that donors in the U.S. and other developed countries know that what they are doing is critical. These donors, and the NGOs they support, are making a difference. No one would argue that. Read through their annual reports and you’ll be happy to learn about the tons of food that have been distributed with their help. Or the thousands of vaccinations that have been given to children. Or, even the number of lives that have been saved from the streets. It is truly impressive. What these donors and NGOs may not realize is that on the other side of the world, there’s another side to this story that isn’t being told. A story that warrants not only our attention, but also an innovative response.The story begins by asking some questions. What impact is this NGO having on the rest of the population who does not receive direct benefits? What does the street peddler, the university student, or the local business owner feel when they see “Save” and “Feed” drive by them day-in and day-out? Do these names empower people to be agents of change?Let’s follow one such pedestrian. She is on her way to work at a small business situated tightly on a small plot of land in the industrial area of Kampala, just over the railroad tracks. Her company–let’s call it “Up and Coming”–has been in business eight years, but lately times have been hard. Employees receive decent salaries and most of the employees are doing their best to live out their dreams of educating their children and owning homes. The business pays taxes, and now employs about 20 men and women who work ten hours a day.When Up and Coming started there were only seven employees, and it achieved impressive year over year growth of 35 to 50%. But now things have slowed. The business has graduated from micro status and is at the threshold between a small and medium size enterprise. To pay Up and Coming’s staff and keep its margins, the company must bid on bigger projects. In order to meet the demands of these contracts, they need to buy the supplies, and because Up and Coming does business in a cash economy, it is forced to take out short-term loans from a local bank. The rates from the bank are 28%. The business targets a 33% margin and must now make a decision: not to compete and lose the contract, or take the loan and pray all of the other factors that impact their cost (electricity, gas prices, grain costs, a riot in Kenya) don’t strike. Up and Coming has 5% wiggle room.Management decides to take out the loan and satisfy the obligations of the contract. But because of the bureaucracy, red tape and forms, the customer [an international organization] takes four weeks to pay. Time is expensive due to the bank’s terms, and the business nearly goes under. Up and Coming must hold off on paying its employees, and a few (the more talented) get frustrated. One even leaves.After that, Up and Coming can’t compete on a number of government contracts because it can’t handle the size or the intense requirements that are embedded at the bottom of the request for proposal (RFP). So, the enterprise see a modest 5% growth.Now let’s follow Up and Coming for the next two years. Growth remains tiny in comparison to the early years. But the business has saved enough to buy another machine that will increase production to a point where Up and Coming can finally compete on something bigger. Up and Coming changed how it packages product, and the business achieves certification from the International Organization for Standardization (ISO). Management keeps accurate books so that they can offer audited financial statements—a definite badge of honor. They play by the rules and work hard to pay employees on time. Things start looking up.Finally, the day comes when they get a break. A government request for proposal (RFP) has been released asking for help with some development work financed by an international government grant. It’s perfect, and appears to be written to Up and Coming’s strengths; there is no question that it can meet the terms of the contract. Up and Coming has significant inventory, it’s hired 30 more staff, and established itself as a quality company with a good brand. Management prepares a sales pitch and gets ready for a chance to present.As they arrive at the meeting, the sales team finds out that a few other companies are competing on the same RFP. Two of the companies are known competitors which Up and Coming is positioned to beat. The other, however, is a newer company that has a government minister “consulting” for them. The company has some impressive marketing tools but no real track record. The minister, who is with the new company’s team, walks out of the room just as Up and Coming is entering to give its pitch. He’s laughing and shaking hands with the members on the panel. The sales team’s sprits begin to flag; they fear this sale won’t have much to do with their ability to deliver.The team does its best though, and they can confidently propose the lowest price among the bidders. As the team from Up and Coming leaves the building, it’s a bit more hopeful. But they call a week later to find out that, sure enough, the company with the minister on board was awarded the contract.Within another year the business is experiencing severe financial problems. Up and Coming is on the verge of going under because of the high cost of capital on their remaining loans.This is when I meet with them. I go to their office, on a hot day in January. I find their managing director waiting for me. She’s strong and proud, yet clearly veneered with a layer of bitterness and doubt. I can see it in her body language, and I’m mentally preparing myself for a battle. Business awards and pictures of her with the President of Uganda are hung around the office. Samples of her product are neatly displayed on a rack, and the table is tightly kept.“So. What are you looking to do?” she asks as we sit down. I can sense that she knows (she later told me she read through our web site), but wants to hear it from me. I ease into my story that I have given at least a hundred times. I speak for about five minutes and she listens patiently. I reach the end of my introduction and finish by saying that what we really look for, most of all, is good, ethical leaders that our company can support as they grow their business (I’ve already done some background checking on her and she comes highly recommended).My closing line must have finally done it, because she starts shaking her head and laughing. “I don’t believe that leadership is what a business needs anymore.”“I’m sorry - What?” I ask. I really thought I had misheard her.“I’ve tried ethics. I believed in leadership,” she continues. “I don’t think LEADERSHIP is what is required for a business to succeed here. You don’t win with ethics. People that cheat are the ones that get contracts.”I cautiously sympathize with her, and she goes on. “The U.S. doesn’t want to see Africa improve. You’re here to have jobs. The U.S. has been in Africa a long time. So, tell me. Why just now do you want to invest? What are your motives? Is this some ‘out of the box’ thinking that has resulted from your poor economy?” I was intrigued by her logic.I reassure her that we are trying to lay the groundwork for a new model: market-driven development. I tell her that there are groups in the U.S. that have slowly been organizing–that are trying to find new ways to partner with the businesses in developing economies. People that want to support small and medium-sized businesses. People who understand that it’s time for a change; the African business world must catch up. I closely manage my tone as not to imply too much hope.She nods her head, like she’s heard this all before. “Are you just going to talk about changes like you always do? Or are you serious, and want to have a real discussion?”I’ve heard this under the breath of many of the business owners I’ve been meeting with for the past two years, but she was one of the few that came right out with it. I have begun to realize that RENEW is at an interesting place, sitting between two skeptical players that want to work together, but don’t know how. The idea sounds great, but instead of business, we’re playing poker—each side wondering if the other is lying or really has a hand worth playing.A strong part of me believes that we can successfully broker a relationship between these players. Another part of me fears she’s right. That our work may not play out, that this idea might be too early or that excuses will always come up—a down economy, not quite enough information, or “just a little more time.”Having had to set clear expectations with everyone that I meet with, I’ve practiced my answer to her question more than once. This time however, I feel a bit more convicted. I look her in the eyes and say, as honestly as I can “I don’t know the answer to that. I don’t know if I can do anything for you. I’d actually ask you to expect that I can’t. We have a long way to go and a lot to learn.” But I tighten my grip on my chair, lean in and deliver a line that every member of our team has said at some point when things get rough: “All that I can ask is that you let us try. Change has to start somewhere.”She studies me for about ten seconds (felt like two hours), and then seemingly satisfied with my answer, slowly straightens up in her chair and lets a warm smile creep across her face. Pushing back her hair, she shifts focus to her laptop and says, “Would you like a presentation on our company?”Relieved, I smile and politely nod with a soft “Yes.”She delivered an impressive PowerPoint presentation; an honest display of her company’s business model (with flow charts), their financials, there strategy for the future, and the challenges they are up against. I am impressed, and we agree to have RENEW represent Up and Coming in the U.S.“I’ll keep you posted” I say, and desperately hope that I am able to come back with good news. As I pull out of the plot, I take notice of the cars on the road. There are large, beat up flat-bed trucks creeping slowly around massive pot holes. There are smaller cars running goods back and forth between warehouse and supplier. There a boda bodas weighed down by large steel rods, wood, and boxes. But, in this industrial area I don’t see any white SUVs around. As I played our conversation back in my head I wondered if the words on the sides of those SUVs had finally gotten to her. I went back to her question. I truly hope we are not just talking...

It’s no wonder there’s an air of helplessness...

Company Profile: A Case for Impact Investment

<h1 style="text-align:center;">A Case for Impact Investing, Cont.</h1>What if the solution to global poverty didn’t rest in the hands of a few Harvard economists, or executives from the World Bank, or some leading development experts on retainer in Ghana? Not in a massive government building, nor within the ivy-laden walls of a university, nor at the podium of the United Nations. What if the solution is in the mind of a Ugandan seed producer and a business-savvy American? RENEW believes that a significant piece of the poverty puzzle can be solved when such a tourist meets a passionate, hard-working entrepreneur — particularly when this happens 100,000 times over.In our January 23, 2009 post, we met the Ugandan entrepreneur. Now let’s meet our tourist. Keep in mind, it may be you or someone you know. They’re your neighbor down the road, your friend Tom. The one that just took that safari last summer. If you were traveling with him, this is what you may have seen…After an amazing journey through some of the most rugged and beautiful land on the planet, and seeing a spectacular range of wildlife, Tom was convinced that he and his family had truly experienced Africa. On his way back from the reserve, his kids got thirsty, so Tom stopped by a small store on the roadside to get some drinks. Stepping out of the Land Rover, he was immediately surrounded by a group of children begging for money. Because Tom’s a compassionate person, and because he just spent $5,000 on a safari, guilt causes him to hand over some spare change from his pocket. The four children scuffle to divvy up the loot.As he walked into the store, three vendors immediately surrounded him trying to get Tom to buy from them – “all the stores are the same,” Tom thought. Trying his best to drown out their pleas, he finally found what seemed acceptable and bought four warm Cokes. After he handed off a few bills from his wallet to the lucky vendor, he noticed the other two peacefully turn away and return to their respective perches, waiting for the next tourist to come by. As Tom climbed back into his SUV and headed for the airport, he was noticeably distant, gripped with cognitive dissonance — Africa is beautiful and full of potential, and yet gripped in poverty.You watch Tom contemplate this dilemma in his head, idly staring out the window at the distant city skyline. You notice that Tom seemed troubled during the entire flight home. After what seemed to be hours of squirming in his seat, Tom leaned over to his wife and started with his famous “what if.” You’ve seen this before — Tom starts in: “What if those were our kids on the street?” “What if I was that vendor and that was my business?” “What if I hadn’t been raised on Elm Street, but in a back ally of Nairobi?” “What if I didn’t get an education, or have that amazing teacher?” He asks these, not expecting an answer, but searching for resolution.His thoughts wander back to what it was like growing up in America. He went to high school, fell in love and graduated from college. He worked for a good company, and after a few years of making a name for himself, he and some friends had an idea. They wrote out a business plan, moonlighted for a few months, scrounged up some money from friends and family, and went full-time to work on their dream. They got the business going, and then got a loan from a local bank. Ten years later they sold the company, made a few million and went their separate ways. Tom was now trying to spend some much deserved time with his family. His kids had been talking about Africa ever since they saw some movie in school about the civil war in Sudan, and they pleaded with him to take them on an adventure. Just excited to see his children interested in something other than Xbox or American Idol, Tom jumped at the opportunity; he was ready for an adventure too. So he contacted his travel agent, booked a flight and there they were in Africa…Now we get to ask “what if.” What if Tom had a way to deal with his dilemma? What if he were able to shift his association of Africa with poverty to Africa with opportunity? What if he were able to zoom out, and see the economic development that could occur if provided the right support? What if Tom had not gotten out of his Land Rover, and instead, driven to the industrial park on the outskirts of the city? What if Tom would have met the business owner in need of capital and support (<a href="company-profile-case-impact-investment.html">Read that story</a>)? After all, she had employed the mothers of the children Tom had met that day. What if they had a conversation, and the owner told a story of a vision she had to start a company that employed women and supported a growing industry in her country, one that would provide seeds and jobs to thousands of small farmers?But instead: she sadly explains that she had to let some of her workers go last month. The interest rates on the bank loan she had to take to meet the demand of a contract that didn’t yield the profit she needed to keep the employees on once the contract was over.Here’s the secret that the scholars, economists and experts haven’t grasped: The solution to poverty will become clear when Tom, and the thousands of others who have had similar experiences, meet the business owner and begin a business relationship; one that unlocks the vision and potential within the entrepreneur, and addresses the dilemma within Tom. The interaction, and thousands like it, will shift the way that we in the West see Africa. But first, Tom must encounter the entrepreneur.Stay tuned…

What if the solution is in the mind of a Ugandan seed producer and a business-savvy American?

A Case for Impact Investing, Cont.

<h1 style="text-align:center;">Recent U.S./Uganda Investment Forum in Chicago</h1>There is an ever-increasing voice within the African Diasporas to find common strategies to financially engage their home countries. The Ugandan Consulate in Chicago, Ugandan Embassy in D.C. and the Ugandan Investment Authority recently responded by hosting the first annual U.S./Uganda Trade and Investment Forum this September.For a first-time effort, the response was powerful. The Office of the Mayor of Chicago, the Ambassador of Uganda, the Governor of Illinois and State Department representatives were among the voices supporting a pro-active investment strategy. Additionally, six members of Parliament flew in for the event and shared their support from all reaches of Uganda. The room was committed to creating an enabling environment for trade and investment opportunities between businesses and government agencies located in the United States and their counterparts based in Uganda.There was also a significant private sector presence as the Bank of Uganda director, Ugandan investment bankers and fund managers mingled with dozens of small- and medium-sized entrepreneurs from both the U.S. and Uganda. Some were just getting the lay of the land while others were agreeing on specific action items between the parties.I was surprised by the frank, yet polished discussion and clear desire by the participants to stop simply talking about the potential and start doing something. The group heard from a variety of entrepreneurs who provide services or products and need linkages to build their business to the next level. Both the private sector and public officials were able to provide real value-add feedback to these business owners in terms of relationships, tax ideas, AGOA strategies, and further marketing. The government speakers outlined public benefits and programs that would enable investment or jump start current businesses.Although I didn’t see any contract signed in the room, it was clear that a wave of energy had inspired the parties. As I said goodbye and collected contact information I couldn’t help but note a real sense of excitement and hope for the path forward. The presence and meaningful participation from high level decision makers from both the public and private sector gave confidence to the men and woman from both the U.S. and Uganda who will be putting their money on the line to open the door for a vibrant trade relationship between the two countries.

There is an ever-increasing voice within the African Diasporas...

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Recent U.S./Uganda Investment Forum in Chicago

<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 In-Depth Interview with Valerie Muigai of Kijani Baby</h1>For more pictures from Kijani, download our recent <a href="https://latest-api.renewcapital.com/uploads/RENEW_2020_2021_Impact_Report_web_5e1a98866d.pdf">Impact Report</a>, and read an abbreviated version of the following story called “Fighting for Women’s Jobs Amidst Uganda’s Strict Lockdown” on page 19 of the report.When the COVID-19 crisis nearly shut down Kijani Baby, the Uganda-based reusable diaper company persisted through every roadblock, ultimately increasing local business, maintaining production and ensuring staff employment and safety, while adhering to regulations amidst one of the world’s harshest lockdowns.&nbsp;Before the world barely knew of a pandemic, Kijani Baby was facing the first of many hurdles. Fabric production in China and imports were halted, abruptly cutting off raw materials for Kijani’s production. Soon Uganda’s very tight lockdowns and transport restrictions paused local operations and sales, while international border closures followed, impeding the business’ ability to fulfill export orders—just as demands for reusable diapers skyrocketed around the world.&nbsp;&nbsp;<figure class="image"><img src="/uploads/Screen_Shot_2021_07_07_at_5_51_16_PM_bc17b00fe8.jpg"></figure>Around every corner, Muigai and team found a creative and resilient solution. When public transportation was banned, they kept the workshop open with staff who lived in walking distance. When private transport for delivery was halted, they shifted to a local online delivery service. When airlines shut down cargo flights and halted exports, they trialed new ways to move products with DHL. “Everyone on the team stood their ground to make sure that the business came out alive on the other side of the pandemic,” Valerie said. “Now it is exciting to see that growth has picked up again, and we can continue to hire more women, expand our production and expand our brand.”Here’s what Valerie had to say during a recent conversation. How did you and Kijani experience the pandemic?&nbsp;It was quite a year. For us in Uganda, we heard about the pandemic from China because that is where we bought our fabric. Quite quickly, the hardest lockdowns in the world came to Uganda. Thankfully, we managed to keep our workshops open because many of our staff lived within walking distance.&nbsp;Even while operating legally, we were stopped by police while dropping our products to our customers nearby. Around April, our suppliers in China became operational again but before then we were working on keeping the company alive and people paid. April to June, we had very low sales. We had to figure out a way to push out the delivery of our items and push out our inventories.We didn’t let go of our staff. Tailors are paid per item so our costs decreased of course, but we didn't have to let go of anyone. I was always in the office where we taught our staff about COVID, gave everybody masks and sanitizers, and worked to keep everybody safe. Even if there was fear at first, we managed to keep everybody employed.&nbsp; &nbsp;Does the term “standing ground” mean anything to you in light of your 2020 experiences?&nbsp;I am a very determined person and quite optimistic, so every time restrictions came, I remember saying “we can move through anything.” But there was a time when basically nothing was working. That was when our air shipment had been sent back to us, private cars had just been banned and shops had just been closed. And I remember feeling like I had to lower my expectations. January and February 2020 were really great months for us; we had a lot of plans for growth, but I realized I needed to shift my priorities from growth to survival, and growth would come afterward.&nbsp; I don't think there was a time we really considered shutting down. We were all determined to find a way to get through this and stay alive. People needed to keep their jobs. And so many people with day-to-day work had lost their jobs. It was so important for us to make sure that our people kept a source of income during the pandemic, and to make sure that we protected the business so that they can keep a source of income after the pandemic. Those were the two goals that I thought of. Growth doesn't matter right now -- we have to 1) stay alive and 2) keep our people paid. In those few months, everybody on the team pulled together to make sure we continued operating. It wasn’t only me, but the team did stand their ground to make sure that we came out alive on the other side. Not alive as people, but as a business.&nbsp; What was your biggest personal challenge?Keeping everything together. I have three kids homeschooling at home, my husband was stuck in the UK and with the uncertainty of the restrictions, I had to keep the business going. I had to be optimistic for my family and employees and not show this side of me just to keep them going.&nbsp;&nbsp; What was your biggest lesson from 2020?The ability to think quickly, change plans, find a way to make things work; this was felt throughout my team. Persistence and creativity. The year put challenges into perspective. I have been running Kijani for six years, but the most challenging times were the first three months of COVID. I hope the future challenges don’t change life as this one did, but it gave me and my team more confidence that if challenges come, we can find a way to go through them.&nbsp; What’s Next for Kijani?It's exciting to see that growth has picked up again. We are excited to see that we can build the export market, especially in the UK, with our brand story -- that the products are made by women and women are paid well, and the product is reusable. I want to hire more women, expand our production and expand the business.&nbsp;Disclaimer: This blog is provided as a recounting of the IAN’s and RENEW’s interactions with Kijani and the happenings at Kijani. This blog is not intended as performance data related to the IAN’s investment in Kijani. Information about Kijani pertains only to Kijani and is not indicative of other companies in the IAN’s portfolio or the performance of investments in them. Any discussion of the performance of Kijani or its social impact is no guarantee that such performance or impact will be realized by other IAN portfolio companies or other investments managed by RENEW, now or in the future.

Renew Capital Angels invested in Kijani Baby, a cloth diaper and baby products company launched in 2013 to address Uganda’s need for modern, high-quality and environmentally-friendly cloth diapers and baby products. The company now sells baby products in Uganda and international markets. Kijani Baby is committed to offering positive employment opportunities for Ugandan women.