<figure class="image"><a href="https://assets.renewcapital.com/hubfs/General/Trade%20Begins%20With%20Finance.pdf" target="_blank" rel="noopener noreferrer" download="download"><img src="/uploads/blog_graphic_trade_c9221fa348.webp"></a></figure><h4><a href="https://assets.renewcapital.com/hubfs/General/Trade%20Begins%20With%20Finance.pdf" target="_blank" rel="noopener noreferrer" download="download">Download</a></h4><h2>Why Canada’s Next Major Economic Opportunity May Be in Africa</h2>For years, the global conversation around Africa has been trapped in an outdated framework: aid, extraction or “future potential.”But the numbers increasingly point somewhere else entirely.Sub-Saharan Africa is projected to be the world’s fastest-growing region through the remainder of the decade. Africa’s fintech sector alone could reach $65B in annual revenue by 2030. More than 600 million people still lack access to reliable electricity. Cross-border payments remain fragmented and expensive. Financial infrastructure gaps continue to constrain trade, energy and SME growth across the continent.That combination of growth, friction and unmet demand is creating one of the world’s largest infrastructure opportunities.And increasingly, that infrastructure is financial.At Renew Capital, we believe the next phase of Canada-Africa trade will not begin with extractive projects or development assistance. It will begin with payment rails, embedded finance, settlement systems, energy financing and the digital infrastructure that allows commerce to scale.That is the argument behind our latest report:Trade Begins with Financial Services: The Case for Canada in AfricaThe report explores:<ul><li>Why Africa’s demographic and urbanization trends are structurally changing global markets</li><li>The rise of embedded finance and digital payments across the continent</li><li>Why fintech is becoming foundational infrastructure for trade and energy</li><li>The emerging Canada-Africa financial corridor</li><li>Three sectors where Canadian firms are uniquely positioned: fintech, clean energy and Natural Resources 2.0</li><li>The operational realities investors need to understand before entering African markets</li></ul>The broader point is simple: Africa is no longer a future story. It is an infrastructure story already underway.The firms helping build the rails today will help define the terms of tomorrow’s trade.Download the full report <a href="https://assets.renewcapital.com/hubfs/General/Trade%20Begins%20With%20Finance.pdf" target="_blank" rel="noopener noreferrer" download="download">here</a>.

Discover why Africa’s fast-growing fintech and financial infrastructure sectors are creating major opportunities for Canadian investors, businesses and trade leaders in the global economy.

Perspectives

large_blog graphic - trade .webp

medium_blog graphic - trade .webp

small_blog graphic - trade .webp

thumbnail_blog graphic - trade .webp

xsmall_blog graphic - trade .webp

blog graphic - trade .webp

Trade Begins With Financial Services

<h1 style="text-align:justify;">Why Africa Should be “Anything But Zero”</h1>Investors and global tech should pay attention to Africa. Here’s why.&nbsp;From the ecommerce titans of Silicon Valley to the fintech hubs of Utah’s Silicon Slopes, the map of innovation has long been a closed loop. Raise capital and build at home. Scale across the country. Expand into Europe. Only then look at emerging markets as a Phase 4 opportunity.Some are starting to see the missed opportunities in that strategy.At Renew Capital, we have spent more than a decade investing on the ground across African markets. What we have seen is not only growth. We are seeing a shift in where real product development happens. Africa is no longer just the world’s favorite charity or a consumer frontier. It is becoming one of the most intense, accessible and high-stakes testing grounds for innovation.If you are a global tech company or an investor with a serious innovation budget, your allocation to Africa should be “anything but zero.”Here is why what some call the most “extreme” market on earth may be your greatest competitive advantage.<h3>1. Africa’s Challenges Are Your Opportunity: If It Works Here, It Could Work Everywhere</h3>The challenges facing African consumers, infrastructure gaps, fragmented payment systems and high-cost logistics are not unique. They are concentrated versions of global friction.In developed markets, innovation often optimizes for convenience. In Africa, innovation is forced to optimize for price, fragmentation, disruptions, funding constraints… and the list goes on. The emerging environment requires companies to contend with so many factors that any startup which survives could become the strongest in the world.&nbsp;The scale of those constraints is real. Power outages alone cost African economies 1% to 5% of GDP each year (World Bank). Roughly half of adults in Sub-Saharan Africa still lack formal financial accounts, even as mobile phones have become nearly ubiquitous across much of the continent (World Bank, GSMA). This is the ultimate startup testing environment.&nbsp;When you build a product that works through unreliable power, low connectivity and fragmented rails, you are not just building for Africa. You are building a battle-hardened system.By the time your product reaches developed markets, it is leaner, the UX is sharper and your system is more resilient than competitors who’ve only ever tested in soft conditions.If it works in Africa, it could work everywhere.<h3>2. Speed of Testing: The Zipline Model</h3><figure class="image"><img src="/uploads/zipline_700d1a8265.png"></figure>Source:&nbsp;<a href="https://en.wikipedia.org/wiki/Zipline_%28drone_delivery_company%29">Zipline’s Wikipedia page</a>One of the greatest barriers to new technology in developed markets is regulations.In the U.S. or Europe, to even begin testing could take a startup years until it has the right approvals. Africa offers something different: access.Governments are often more approachable and more willing to partner on solutions to immediate challenges. Take the case of&nbsp;<a href="https://www.zipline.com/about">Zipline</a> and their early start in Rwanda. While regulators in the U.S. were still debating drone delivery, Zipline was already operating at scale, completing tens of thousands of medical deliveries and building years of real-world flight data.In Rwanda, they did not just test. They proved their innovation.By the time Zipline approached more restrictive markets, they did not arrive with a pitch deck. They arrived with years of delivery data to show their business worked. Listen to the story here:&nbsp;<a href="https://open.spotify.com/episode/7qmfnrCPt9UxIcKEMdnbeN?si=UFthjEo6R5GKFDU5c8Mizw">LINK</a>Africa gave them the space to make the impossible real.<h3>3. Underdevelopment is a Huge Advantage: Building Without the Ghost of Legacy</h3>Our opinion is this: What many see as Africa’s weakness, underdevelopment, is its greatest advantage.In developed markets, innovation is layered on top of decades-old infrastructure. In Africa, many systems are being built from the ground up using architectures that are mobile-first, API-driven and increasingly AI-enabled.The clearest example is financial services. Sub-Saharan Africa accounts for more than half of global mobile money accounts and more than 65% of global transaction value (GSMA). This is not a game of catch-up. An entirely different system has been built.<img src="/uploads/growth_in_africa_2025_3f60c85552.png">Source:<a href="https://www.gsma.com/sotir?utm_campaign=africa-in-brief-april-03-2026&amp;utm_medium=referral&amp;utm_source=theafricabrief.beehiiv.com">&nbsp;GSMA</a>There are fewer incumbents to fight and fewer legacy systems to work around. That allows companies to design what the next generation of systems should look like, not just improve what already exists.Africa is not retrofitting the past. Instead it is prototyping the future. While startups in other parts of the world are thinking about how to improve banking, innovators across Africa can invent an entirely new model of banking by leveraging modern technology.&nbsp;<h3>4. Massive Scale and Impact Are the Cherries on Top&nbsp;</h3>Africa is not just a testing ground. It is becoming one of the largest and most dynamic markets in the world.By 2050, the continent will account for about one quarter of the global population, with one in three new entrants to the global workforce coming from Africa (United Nations); and the IMF projects Africa’s growth to outpace Asia’s at least through the end of the decade.At the same time, innovation is not confined to a few major hubs like Lagos, Nairobi, Cairo and Johannesburg. It is spreading to Kinshasa, Tunis, Addis Ababa and Abidjan. The share of sub-$1M startup deals outside the continent’s Big Four markets has grown from 28% in 2019 to 43% in 2025 (Renew Capital analysis of Pitchbook data).<img src="/uploads/by_deal_size_4c96473f38.png">Source: Renew Capital’s analysis of data from PitchBook, a Morningstar companyThis is what makes the opportunity unique. You are not testing in a niche market. You are testing in a fast-growing, increasingly distributed system of markets where real adoption happens.You are building with the future, not just for it.<h3>A More Honest View</h3>None of this eliminates risk. Markets are fragmented. Currency volatility is real. Regulation varies widely.But these are not edge cases. They are the conditions that increasingly define the global operating environment.In many cases, the rest of the world is catching up to constraints Africa is already solving for. Next time the power goes out in the U.S. see how people react. Do the same in Africa.&nbsp;<h3>Our Philosophy: The World Should be “Anything But Zero” with Africa</h3>We’re not suggesting you move your headquarters to Nairobi. But in a world where AI is accelerating change, having zero exposure to one of the most dynamic testing grounds on the planet is a strategic mistake.An allocation to Africa, whether through a pilot, a partnership or an investment, is not just a bet on a region. It is an investment in learning.In less than a decade, a significant share of the global workforce will come from Africa. Much of the world is not yet Africa-smart. The fastest way to close that gap is to engage directly.<h3>Bottom Line</h3>The next 20 years will be defined by who can solve the hardest problems. Those problems are already being solved in Africa.Do not sit on the sidelines with a zero on the board.

Investors and global tech should pay attention to Africa. Here’s why. 

Business Growth

image.png

Why Africa Should be “Anything But Zero”

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

Still small, but massive, fast-moving and digital

Skyline Landscape Mobile Money.avif

The Future of Africa’s Private Sector

<h1>Mastering “The Flip”: A Guide for African Startups Seeking International Investment</h1>Ready to learn more about mastering the flip? Check out Renew Capital's&nbsp;<a href="https://training.renewcapital.com/courses">investment readiness</a> training and our quick guide for&nbsp;<a href="https://apply.renewcapital.com/delaware-guide">establishing a Delaware corporation</a>.<figure class="image"><img src="/uploads/580_A0553_79d51b6101.jpg"></figure>My 10-year-old is into gymnastics. She practices “flips” against the wall while I’m trying to get her to eat dinner. How can something so impressive be annoying at the same time? That’s not the kind of flip I want to talk about, though there is likely to be plenty of stamina involved.In 2024,&nbsp;<a href="https://thebigdeal.substack.com/p/2024sum">African startups raised $2.2B</a>, according to Africa: The Big Deal but securing this funding often requires strategic decisions about where to incorporate. Approximately&nbsp;<a href="https://ng.usembassy.gov/u-s-consul-general-will-stevens-keynote-address-at-the-global-tech-africa-conference/">60% of African startups are registered in the United States</a> and for Nigerian startups, that number is 80%.This preference for offshore incorporation is largely driven by investor requirements, legal frameworks and access to global capital.&nbsp;“The flip” is a term commonly used by international investment firms that are focused on Africa. It refers to the process where African companies set up parent companies offshore, with the original African companies becoming&nbsp;<a href="https://www.investopedia.com/terms/w/whollyownedsubsidiary.asp">wholly owned subsidiaries</a>. It’s one of the first questions we ask companies who are seeking an investment from Renew Capital: “Do you have a holding company, and where is it registered?”This isn’t a trivial question. Many investment firms insist that African startups be domiciled outside their primary area of operations—often in Delaware (the U.S.), Mauritius, Europe, etc.&nbsp;Why? There are plenty of reasons: the predictability of legal systems thanks to well-established corporate governance laws, global intellectual property protections, access to robust dispute resolution mechanisms, and yes, sometimes it comes down to tax efficiency. It doesn’t stop there. For investors, there is also&nbsp;<a href="https://stripe.com/en-sg/resources/more/incorporating-in-delaware-explained">comfort in working within familiar legal systems</a>, reduced currency risks, easier exits, IPO potential, fewer foreign exchange controls and frankly, avoiding corruption. These factors make “the flip” not just a preference but, for many investors, a de facto requirement.<figure class="image"><img src="/uploads/580_A0787_9d89da464c.jpg"></figure>Yet, for something so common, there’s surprisingly little data on how easy or difficult it is to flip a company.&nbsp;Here’s the reality: Flipping is one of the most critical factors in attracting more startup funding to African countries, yet it’s often overlooked. Most policymakers I speak to do not have an idea of how long it takes to flip a company in their country.I get it. Many African governments don’t like that this has become a de facto investment requirement. But it has. Almost every Venture Capital and Private Equity firm in the world will insist on it. Does this overlook the long-term value of supporting local ecosystems? That’s certainly a discussion worth having. Some organizations are working to make African jurisdictions more investor-friendly by improving legal frameworks, transparency and market infrastructure. At Renew Capital, an early-stage investment firm in Africa, we count ourselves in that group. Building entrepreneurial ecosystems is a worthy effort but it takes years—and it will take even longer to convince the global market that these changes are going to stick. By 2030, sub-Saharan Africa will account for half of new labor force entrants, requiring up to 15 million new jobs annually (<a href="https://www.imf.org/en/Blogs/Articles/2024/11/12/the-clock-is-ticking-on-sub-saharan-africas-urgent-job-creation-challenge">IMF</a>). Fostering private sector firm growth today is a major requirement for the region.So in the meantime, the legal paths between many African countries and Delaware (and Mauritius, etc.) will continue to be well-trodden.At Renew Capital, we have been conducting research across several countries to determine how long this process takes.&nbsp;Step one is usually to register a new holding company (in the form of a corporation) in Delaware (as an example). It’s pretty fast and easy and takes about a week. It (of course) will cost you if you want a lawyer to help with the process. Mauritius is about the same—a lot more regulatory and compliance requirements, but tax advantages. No need to even visit!&nbsp;Once that’s done, founders need to ensure that the exchange of shares by the shareholders in the local operating company for shares in the offshore holding company is completed. This is finalized by filing share transfers in the relevant African countries of operation. In practice, our research suggests it can take anywhere between 14 days (e.g., Kenya and Morocco) and up to 18 months (e.g., Ethiopia) because this is generally a pre-condition to investment, this is probably the most significant barrier to increased investment in some countries.Is “the flip” right for every company? Definitely not. But, if you’re looking for&nbsp;<a href="https://www.redfernlegal.com/understanding-the-flip-up-moving-your-headquarters-hq-process/">venture capital investment from an international investor</a>, then you’ll almost certainly need to do it at some point.If you’re serious about scaling your startup and mastering every step of the flip,”&nbsp;<a href="https://training.renewcapital.com/courses">sign up now</a> to get access to both Investment Readiness 101 (best for beginners) and Closing the Deal (for those actively pursuing an investment). The training covers all the important details from legal due diligence to how to get your valuation right. Also, check out the Renew Capital guide for&nbsp;<a href="http://apply.renewcapital.com/delaware-guide">establishing a Delaware corporation</a>.&nbsp; Note: While Renew Capital’s guide provides helpful insights into establishing a Delaware corporation, it is essential to remember that the information presented here is for general informational purposes only and should not be considered legal advice. We strongly recommend that you consult with your own legal counsel or a qualified professional to determine what jurisdiction and legal entity structure is right for your company.

Check out Renew Capital's investment readiness training and our quick guide for establishing a Delaware corporation.

Image: Renew Capital mentor talking with African startups and partners

580A0553.jpg

 Mastering “The Flip”: A Guide for African Startups Seeking International Investment

<h1>Smart Philanthropy: Use Your DAF to Shape Africa’s Future</h1>Using a Donor-Advised Fund (DAF) for impact investing in Africa is a smart way to gain tax benefits while making a positive difference. This guide explains how to use your DAF effectively, the benefits of investing in African ventures and the steps to start this impactful journey.<img src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdYtY1Zcl0tvoTkHoaWNzCcYIMLQrLqaydOeUM4zCXxlFNQ5mss00Y5dOxOHirfM4rEYllxZgk32jjWsHaGvYXT7V1H1dYqdtKGN9O0TC2KXJrJatrOeX5iNJpVUrZmaoCD6afpZQ?key=iJTOOe2QxD9-YSlET2v78_Z2" alt="Graphic of Renew Capital's model for impact investing in Africa through a Donor-Advised Fund (DAF), illustrating how investors can fund impactful ventures across the continent.">Source:&nbsp;<a href="https://www.renewcapital.com/">Renew Capital</a>Understanding Donor-Advised Funds (DAFs)A&nbsp;<a href="https://www.fidelitycharitable.org/guidance/philanthropy/what-is-a-donor-advised-fund.html">Donor-Advised Fund</a> is a charitable investment account for philanthropic giving. You can donate cash or assets to this account, get a tax deduction right away and then decide over time which charitable organizations will receive the funds. This approach offers flexibility and potential tax benefits for charitable contributions.&nbsp;<h2>The Rise of Impact Investing</h2><a href="https://www.ifc.org/en/our-impact/impact-investing-at-ifc">Impact investing</a> refers to investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. This approach has gained traction as investors recognize the potential to address global challenges through strategic capital allocation. By aligning investments with personal values, donors can support initiatives that drive social change while achieving financial objectives.&nbsp;<h2>Why Africa?</h2>Africa presents a&nbsp;<a href="https://blogs.cfainstitute.org/investor/2022/10/14/eight-reasons-why-africa-is-primed-for-impact-investing/">unique opportunity</a> for impact investing due to its rapid economic growth, youthful population and abundant natural resources.<ul><li>Economic Growth and Potential:&nbsp;Sub-Saharan&nbsp;<a href="https://www.worldbank.org/en/region/afr/overview">Africa's economy</a> is projected to grow by 3% in 2024, up from 2.4% in 2023, with expectations to accelerate to 4% in 2025 to 2026.&nbsp;This growth is driven by increased private consumption and investment.</li><li>Youthful Demographics:&nbsp;Africa has the&nbsp;<a href="https://au.int/en/youth-development#:~:text=Africa%20has%20the%20youngest%20population,development%20index%20of%20African%20nations.">youngest population</a> in the world with more than 400 million young people aged 15 to 35. Harnessing this potential through education and skill development is crucial for sustainable growth.</li><li>Technological Advancements:&nbsp;The continent is experiencing a digital transformation, with mobile technology and internet penetration opening new avenues for entrepreneurship and access to global markets. Initiatives like the African Continental Free Trade Area (AfCFTA) aim to create the&nbsp;<a href="https://www.ft.com/content/2b867f0f-522e-47e4-b619-aa3b728a7cfd">world's largest free trade area</a>, involving 54 African nations and 1.47 billion people, by reducing tariffs and fostering intra-African trade.</li><li>Natural Resources:&nbsp;Africa's&nbsp;<a href="https://www.unep.org/regions/africa/our-work-africa#:~:text=The%20largest%20reserves%20of%20cobalt,internal%20renewable%20fresh%20water%20source.">abundant natural resources</a>, including minerals, oil and arable land, offer significant opportunities for investment and development. The largest reserves of cobalt, diamonds, platinum and uranium in the world are in Africa. Sustainable management of these resources can lead to long-term prosperity.</li></ul><h2>Benefits of Using Your DAF for Impact Investing in Africa</h2><ul><li>Tax Advantages: Contributions to a&nbsp;<a href="https://money.usnews.com/investing/investing-101/articles/what-are-donor-advised-funds">DAF are tax-deductible</a> and any investment growth within the fund is tax-free. This structure allows for more capital to be allocated toward impactful investments.&nbsp;</li><li>Flexibility: DAFs provide the flexibility to recommend grants to various charitable organizations and invest in initiatives that align with your philanthropic goals.&nbsp;</li><li>Amplified Impact: By&nbsp;<a href="https://www.renewcapital.com/newsroom/investing-in-africa-with-a-daf">investing in African startups</a>, you support economic development, job creation and innovation in regions that can benefit significantly from such investments.&nbsp;</li></ul><h2>Steps to Start Impact Investing in Africa with Your DAF</h2><ul><li>Research and Identify Opportunities: Begin by researching sectors in Africa that align with your interests, such as renewable energy, healthcare or education.&nbsp;</li><li>Set Up a DAF:&nbsp;Choose a financial institution or donor-advised fund sponsor to establish your DAF. Organizations like&nbsp;<a href="https://www.uicharitable.org/">UI Charitable Advisors</a>,&nbsp;<a href="https://impactassets.org/">Impact Assets</a> and&nbsp;<a href="https://www.impactfoundation.org/">Impact Foundation</a> can help guide you through the setup process, offering strategic advice to align your DAF with your philanthropic goals.</li><li>Assess Market Risks: Understand the unique market risks associated with African investments, including political instability, currency fluctuations and regulatory challenges. Renew Capital keeps track of the momentum of&nbsp;<a href="https://www.renewcapital.com/newsroom/the-momentum-of-african-startup-ecosystems-in-a-snapshot">African startup ecosystems</a>.&nbsp;</li><li>Partner with Experienced Organizations: Collaborate with organizations experienced in African markets to navigate the complexities of investing in the region. For instance, Renew Capital focuses on investing in growth-oriented companies in Africa.</li><li>Monitor and Measure Impact: Establish clear metrics to assess the social and financial impact of your investments. Regular monitoring ensures that your investments are meeting your philanthropic objectives.&nbsp;</li></ul><h3>Conclusion</h3>Leveraging your Donor-Advised Fund for impact investing in Africa allows you to align your philanthropic goals with investment strategies that drive meaningful change. By supporting early-stage African startups and ventures addressing critical challenges, you can make a difference while enjoying financial benefits. Start exploring opportunities today and put your DAF to work in Africa to make your money make a difference.For a detailed guide on how to invest in Africa with your Donor-Advised Fund, check out<a href="https://docsend.com/view/4ab7rf7hs33a6wvm">&nbsp;this comprehensive resource</a>.

Learn how to use your DAF to support early-stage startups in Africa and drive impactful change.

Learn how to use your DAF to support early-stage startups in Africa and drive impactful change. (1).png

Smart Philanthropy: Use Your DAF to Shape Africa’s Future

<h1>Love And Tough Love: Our Take On 8 African Startup Ecosystems</h1>Our bird’s eye summary on the heels of our investment tourRenew Capital, along with a growing network of angel investors from around the world, have spent over a decade immersing ourselves in the vibrant cultures and entrepreneurial spirit of Africa. We initially focused on Ethiopia - not easy, but rich in culture and packed with potential - and have recently expanded across the continent into 9 countries. We’ve had wins, losses, and an amazing investment experience…and we’re just getting started.&nbsp;&nbsp;Each day we see new signs of growth. Laura and I recently embarked on a six-week investment trip across East and Southern Africa, including a visit to Ghana in West Africa. We engaged with more than 100 founders with the aim of selecting the best deals for our upcoming Renew Venture Lab Fund, which is a feeder fund to our venture capital fund. What we observed was a brilliant, diverse and energetic blend of talent, culture and progress. Africa is without a doubt changing and developing, much faster than most of the world may even be aware of. I hope this brief recap sheds light on this potential and inspires some of you to get on a plane and join us for an unforgettable investment experience.&nbsp;<div class="raw-html-embed"><style>
 .video-container {
 position: relative;
 padding-bottom: 56.25%; /* 16:9 aspect ratio */
 height: 0;
 overflow: hidden;
 }

 .video-container iframe {
 position: absolute;
 top: 0;
 left: 0;
 width: 100%;
 height: 100%;
 }
 
 /* Media query for smaller screens */
 @media (max-width: 767px) {
 .video-container {
 max-width: 100%;
 }
 }
</style>

<div class="video-container">
 <iframe width="1000" height="562" src="https://www.youtube.com/embed/vQ66TyXt5do?si=Ax7Bv9GfKbgIsGin" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="">
 </iframe>
</div>
</div><h3>A short manifesto&nbsp;</h3>I believe (and hope) that in the next ten years, the West’s perspective of Africa will undergo a radical paradigm shift, resulting in the redirecting of billions of dollars given each year in the form of aid and charity to investments in Africa’s burgeoning startup ecosystem.&nbsp;There has not been one discussion I have had in the last 5 years where I heard an African advocate for more charity or aid. The continent seeks partners that believe in their potential and will invest in their future. And that future is being written in the code of startups and the strategies of relentless entrepreneurs.&nbsp;At Renew Capital, we're working with a global network of investors who are not just observers; they are actively participating in this transformation. And the founders we are backing are embracing their new role as the ambassadors of Africa’s future.&nbsp;Africa is not just rising – it's thriving, innovating, and redefining possibilities.Now, let's delve into the highlights of our visits to various countries, shedding light on their entrepreneurial spirit and investment potential.<h3>Addis Ababa, Ethiopia: Awakening the Sleeping Giant (our home)</h3>Please note that I’m biased in my analysis of Ethiopia. It’s our Africa home and I have a deep place in my heart for this great country. I also have some tough love for her; earned through holding our ground during a civil war and losing a number of investments in that season.&nbsp;Ethiopia, historically considered a dormant tech market, is experiencing a surge in fintech interest. The introduction of&nbsp;<a href="https://www.renewcapital.com/newsroom/m-pesa-launches-in-ethiopia">M-PESA</a> sets the stage for exponential growth, with innovative partnerships and government initiatives fostering a conducive environment. Renew Capital, present in Ethiopia for 12 years, believes in the awakening of this market. That said, we’re moving with caution. While the capital markets are opening up, it takes time for the motivations of leaders to work their way down to the rank-and-file bureaucrat who approves or rejects your investment license. We’re ready to fight for every approval - Ethiopia is a sleeping giant and its tech scene is 20 years behind others, but when it decides to move it will be huge.&nbsp;<h3>Accra, Ghana: A Rising Star in Fintech?</h3>Ghana is gaining attention as an emerging destination in the African fintech landscape. Comparisons to stable Rwanda and entrepreneurial Uganda create a market balancing stability with innovation. Ghana's focus on financial inclusion and cross-sector collaborations indicates a promising future. We're excited to make an investment there, soon!<a href="https://www.mckinsey.com/industries/financial-services/our-insights/fintech-in-africa-the-end-of-the-beginning#:~:text=Ghana%20and%20francophone%20West%20Africa%20are%20expected%20to%20show%20the%20fastest%20growth%2C%20at%2015%20percent%20and%2013%20percent%20per%20annum%20respectively%2C%20until%202025.">15% per annum</a>: Ghana is the fastest-growing fintech market in Africa.&nbsp;<h3>Dar es Salaam, Tanzania: Kickstarting the Ecosystem</h3>In some ways, Dar es Salaam reminds me of Addis - starting up and ripe with potential. But we need to get movement to go from potential energy to kinetic energy, and that’s going to require some big, focused pushing.&nbsp;When we were there the ecosystem seemed close-knit and small. There was a youthful energy to the meet-ups we hosted and attended. It seems the government is supporting tech and innovation, so, while our pipeline was thin, we are eager to roll up our sleeves and start working “in and on” the ecosystem. I give it another 12 to 24 months and we’ll start seeing an impressive pipeline of deals coming out of Tanzania.&nbsp;I would have liked to see a bit more innovation and more traction from the companies that pitched to us. That said, we’ll definitely be coming back to a few of them (awesome founders), soon.&nbsp;<h3>Lusaka, Zambia: Discipline and Stability are Good for Growth</h3>Lusaka mirrors Rwanda's disciplined setup, offering stability and potential for growth. Investments in tech infrastructure and educational initiatives to bridge the skills gap contribute to a conducive environment for tech companies. It was hard for me to get a strong read on the ecosystem, so we’ll need to spend more time getting our heads around how the cultural environment impacts its investment potential. Oddly I would say of all the places, Zambia was the most polished culture I have engaged with. I found myself looking for some grit, but there were a few founders there that I liked. I was also impressed with the budding angel investment ecosystem; I see co-investment potential on the horizon. I also didn’t feel like the Zambian startups were trying to punch above their weight class - which was nice. They seemed realistic about valuations and their heads weren’t too big, which was a welcome refresher from some countries we visited.&nbsp;<h3>Kampala, Uganda: Dynamic Private Sector Amid Political Transitions</h3>Uganda was the first place I started to do my work in Africa years ago. And its private sector culture has remained a unique blend of chaos and growth. Uganda's laissez-faire strategy is working. But everyone seems worried about the upcoming leadership transition - so we’ll keep an eye on that. But I loved the energy of Uganda and there are some sharp founders doing great work there.<h3>Kigali, Rwanda: Investments and Excitement Bearing Fruit</h3>Rwanda radiates hope for the future. The country is positioning itself as a regional launchpad for startups. International collaborations, outside universities, and a government keen on fostering innovation make Kigali a hub for cross-border startup innovation. “Yeah, but it’s small…” is a true and cliche thing to say. But like Seattle weather, we know there is a lot of sun, and we just hope not too many people find out about it before we get a head start. Rwanda, we're ready!&nbsp;<h3>Nairobi, Kenya: Awesome but Pricey Amid Economic Concerns</h3>Nairobi stands out with sophisticated founders pitching innovative ideas, but (currently) expensive valuations. It’s November 2023, not 2022. Plus, the country is having macroeconomic challenges. All that to say, the talent and maturity of the pipeline in Nairobi is exceptional. I loved it. They have a rapidly evolving fintech ecosystem but we’re navigating it carefully. There is some&nbsp;soft money still sloshing around buying companies at prices that would make you shake your head. The strategic founders will readjust quickly, and position their current raise in a way that enables a faster raise in 12-18 months once the dust settles.&nbsp;&nbsp;<h3>Maputo, Mozambique: A Great Afro-European Vibe and Emerging Tech Scene</h3>Maputo, with its Afro-European fusion, faces some structural challenges but exhibits immense entrepreneurial resilience and potential. Financial inclusion initiatives and international investments in natural gas provide optimism for economic growth. A lot going on with the government "sandbox" initiative. Most companies were too early, but a few...could break out. We are excited to hopefully make our first investments there soon!In conclusion, we're very excited and were amazed by how much diversity and growth potential we saw! Now, it's time to make the hard decisions about who to back and how to come back to.As we continue to expand into some of these untouched and potential-rich markets, we will continue to share our insights with the larger community. We’re driven by a broader mission to change the way the world engages Africa, from giving to investing. It won’t be easy - transitioning and learning to invest. But fortune favors the brave! If you’re looking for an unforgettable experience or you’d like to share your own stories, please don’t hesitate to reach out!&nbsp;Renew Capital aims to back the founders leading Africa's startup revolution. We're gearing up to make significant investments in ventures across 10 countries and 8 sectors. We work with a global network of investors who believe in Africa's immense potential and the power of the private sector to drive innovation and economic development. If you are an accredited investor and would like to learn more, take 2 minutes to&nbsp;<a href="https://www.renewcapital.com/apply">apply to Renew Capital Angels™</a>&nbsp; to schedule a meeting with our team.This blog is intended for informational purposes only and does not constitute investment advice or a recommendation to you, or an offer to sell or solicitation to buy any security. Investments with Renew Capital are speculative in nature and involve a high degree of risk. The Renew Capital Angels invest in companies located and doing business in sub-Saharan Africa. Investors should understand and be willing and able to handle the risks of investing in such frontier markets, which are more significant than the risks associated with investing in securities of U.S. companies or in other developed countries and include the risk of total loss of an investor’s entire investment.

IMG_5612 (1).png

Love And Tough Love: Our Take On 8 African Startup Ecosystems

<h1>Lithium and the Race for Africa</h1>Africa's most significant bilateral trading relationship is with China, reaching a staggering $254B in 2021, surpassing U.S.-Africa trade by four times.&nbsp;Additionally, China holds the top position as the primary contributor of foreign direct investment in Africa, supporting hundreds of thousands of jobs on the continent—approximately twice the volume generated by U.S. foreign direct investment. This dynamic economic partnership underscores China's substantial influence and engagement in the region and the United States’ weakness around investing in Africa.&nbsp;<h4>Figure 1</h4>From 2013 to 2021, Chinese Net Foreign Direct Investment (FDI) into Africa averaged $3.7B annually, while U.S. Net FDI averaged $-.1B over the same period indicating a trend towards US divestment from Africa.Chinese Net FDI Flows vs. U.S. Net FDI Flows to Africa (USD, Billions, Unadjusted)<figure class="image"><img src="/uploads/Images_Website_Ratio_3_297a099f71.png" alt="Chinese Net FDI Flows vs. U.S. Net FDI Flows to Africa (USD, Billions)."></figure>Source: The Statistical Bulletin of China's Outward Foreign Direct Investment, U.S. Bureau of Economic AnalysisChinese funding to Africa peaked at over $28B in 2016, just three years after it announced the&nbsp;<a href="https://www.cfr.org/backgrounder/chinas-massive-belt-and-road-initiative">Belt and Road Initiative</a>, an international infrastructure development strategy intended to boost China’s influence around the world. However, by 2021 funding fell to $1.22B and then fell again to just $994.48M in 2022. China’s challenges create an opportunity for other global players including the United States to invest in the continent and for African countries to develop more comprehensive strategies to capitalize on their natural wealth and build their own manufacturing capabilities.&nbsp;While Chinese investment in Africa over the past two decades far outweighs the U.S., in 2023, Chinese investment has decreased dramatically as a result of challenging economic conditions at home and the global economic impact of the pandemic.&nbsp;One of the ways African countries are stepping up is by developing new local manufacturing facilities for lithium batteries, which could increase the export value of their local lithium and contribute to Africa’s developing local Electric Vehicles (EV) manufacturing market.<h3>The Global Lithium Race</h3>Projections indicate that by 2030, Africa could contribute one-fifth of the world's lithium requirements<figure class="image"><img src="/uploads/Images_Website_Ratio_ec78ab6879.png" alt="Infographic depicting projections that Africa could provide one-fifth of the world's lithium needs by 2030, highlighting contributions from Australia, China, Chile, Zimbabwe and Africa, as forecasted by The Economist."></figure>The lithium mining and battery manufacturing industry is experiencing a growing demand due to the global EV market which is projected to be valued at $1.6T by 2030. Therefore, battery manufacturers need new lithium sources for the long-term supply to serve the growing market. Importantly, Africa's resources, particularly its lithium reserves, play a&nbsp;<a href="https://foreignpolicy.com/2023/08/16/zimbabwe-china-lithium-exports-green-technology-africa/#:~:text=The%20world%E2%80%99s%20clean,domestic%20processing%20there.">critical role&nbsp;</a>in the global shift toward clean energy.There are 98 million metric tons of lithium resources across the globe. South American countries namely Argentina, Bolivia and Chile account for 53%, the largest portion, followed by European countries with approximately 7.4 million tons and Africa with approximately five million tons of lithium resources.&nbsp; Africa's production is expected to continue to grow, increasing the continent’s role in global lithium supply chains.<h4>Figure 3&nbsp;</h4>5% of the global total lithium deposits are located in Africa% of Lithium deposits globally<figure class="image"><img src="/uploads/Images_Website_Ratio_2_4cf3e131f6.png" alt="Global Lithium Deposits: Pie chart indicating Africa holds 5% of global lithium deposits."></figure>Source: Yahoo FinanceThe surge in Electric Vehicles (EVs) in industrial powerhouses like the U.S., China and Europe has prompted strategic attention to Africa's resources in foreign policy agendas.&nbsp;China presently holds a substantial influence over the lithium supply in Africa. China is the largest investor in Zimbabwean <a href="https://foreignpolicy.com/2023/08/16/zimbabwe-china-lithium-exports-green-technology-africa/#:~:text=However%2C%20China%2C%20which%20controls%20the%20world%E2%80%99s%20critical%20minerals%20supply%20chain%2C%20is%20ideally%20placed%20to%20reap%20benefits%20in%20these%20situations%2C%20because%20several%20Chinese%20owned%20companies%20have%20recently%20completed%20processing%20plants%20in%20the%20country." target="_blank" rel="noopener noreferrer">lithium processing</a>, which has the largest deposits on the continent.&nbsp;However, in December 2022, the U.S. took decisive measures to secure its lithium supply. During the U.S. and Africa Leaders Summit in Washington, the United States signed a trilateral Memorandum of Understanding (MOU) with the Democratic Republic of Congo (DRC) and Zambia. The agreement aims to establish a seamless production system for EV batteries, covering the entire supply chain from mineral extraction to assembly line development.By doing so, the U.S. positions itself strategically to counterbalance China's significant influence in the mining sectors of both DRC and Zambia.&nbsp;<h3>Africa is Building Production Capacity</h3>In Morocco plans are underway to build the first operational super-sized battery manufacturing plant capable of producing batteries that can store at least&nbsp;<a href="https://africabriefing.com/africas-first-gigafactory-for-ev-batteries-could-mark-a-turning-point-in-the-continents-energy-transition/">one billion watt-hours</a> of electricity.&nbsp;These plants would not only be able to produce the batteries needed to power EVs but also contribute to broader public energy demands.Moreover, many African governments are recognizing the broader potential beyond raw materials in the global minerals race. Zimbabwe and Tanzania have proactively taken legislative measures to ensure that lithium processing occurs within their borders. To fully capitalize on the lithium boom, both countries are banning raw lithium exports aimed at maximizing profits derived from lithium extraction and processing rather than just exporting raw materials.<figure class="image"><img src="/uploads/Images_Website_Ratio_1_a99712b4b8.png" alt="China's Mineral Imports from Africa: Graph of China's mineral and metal imports from Africa in billions."></figure>After banning raw lithium exports last year, in the first nine months of 2023, Zimbabwe registered a revenue of $209M (ZWD 76B) from lithium exports, which is approximated to be three times as much as last year’s revenue, indicating that local processing rather than raw material exports can increase returns for African governments.&nbsp;<h3>Conclusion</h3>Despite recent efforts by Western and African governments to invest in the EV supply chain, China still dominates.&nbsp;Chinese firms control at least half of the production of battery parts and, in some cases, more than 70% of the manufacturing process for some specific components. The COVID-19 pandemic underscored the risks associated with abdicating control of key supply chains to just one country,&nbsp;<a href="https://www.freightwaves.com/news/how-three-chinese-companies-cornered-global-container-production">as experienced with China and shipping containers during the pandemic</a>. Therefore, it is imperative to take action to diversify control over battery supply chains, particularly as global efforts intensify to reduce carbon emissions. Furthermore, by shifting focus towards the local processing of minerals and the production of EV components and batteries, African nations with abundant mineral resources stand to benefit significantly from the shift to clean energy. Considering China's dominant position in Africa's lithium market and its substantial control over key components in the electric vehicle supply chain, it is crucial for African nations to proactively diversify and localize their production of EV components and batteries, utilizing their abundant mineral resources to seize opportunities in the global shift towards clean energy. At the same time, western governments must aim to invest in EV supply chains to mitigate Chinese dominance over one of the most critical sectors promoting the global transition to clean energy, if they want to remain competitive.

One of the ways African countries are stepping up is by developing new local manufacturing facilities for lithium batteries..

kigali_fotor.jpg

Lithium and the Race for Africa

Renew Capital is at the forefront of Africa's startup revolution. We're gearing up for our most significant venture yet—an investment in up to 20 African startups sourced from 10 countries and 8 sectors. If you are an accredited investor and interested in learning more, take 2 minutes to <a href="https://www.renewcapital.com/apply" target="_blank" rel="noopener noreferrer">apply to Renew Capital Angels™</a> and be part of the transformation.<h1>Embracing Africa's Startup Revolution</h1>Our Journey Through 8 Countries Meeting 50 Startups in 60 Days<div class="raw-html-embed"><style>
 .video-container {
 position: relative;
 width: 100%;
 padding-bottom: 56.25%; /* 16:9 aspect ratio */
 overflow: hidden;
 max-width: 1000px; /* Set your desired maximum width */
 margin: 0 auto; /* Center the video */
 }

 .video-container iframe {
 position: absolute;
 top: 0;
 left: 0;
 width: 100%;
 height: 100%;
 }

 /* Media query for smaller screens */
 @media (max-width: 767px) {
 .video-container {
 max-width: 100%;
 padding-bottom: 75%; /* Adjust aspect ratio for smaller screens if needed */
 }
 }
</style>

<div class="video-container">
 <iframe width="1000" height="562" src="https://www.youtube.com/embed/fMGWYfXyMyw?si=mIgmRYAfHvA1mn-h" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="">
 </iframe>
</div>
</div>Across the continent in 60 days: snapshots from a few of the countries on Matt and Laura’s whirlwind tour. Photos courtesy of Renew Capital.After living and investing in Africa for more than a decade, we've embarked on what could only be described as an extraordinary adventure. Through the highs and lows, successes and setbacks, we've been building what we envision to become one of the region's premier investment firms.Our story is one of true entrepreneurship, marked by the same trials and triumphs faced by those we invest in. From our base in Ethiopia, the "sleeping giant" of the African investment landscape, we've expanded across nine countries. Our recent marathon journey through 8 countries, meeting 50 startups, has reaffirmed a few things:<h2>Africa’s Moment Is Now</h2>The Western perspective on Africa is due for a paradigm shift. The era of simply giving is being outpaced by a more impactful strategy: investing in Africa’s future. The continent is not looking for handouts; it is seeking partners in progress. Partners who understand that the future is being written in the code of startups, in the strategies of entrepreneurs who are as visionary as they are relentless.At Renew Capital, we're not just observers; we're active participants in this transformation. Our history on the continent has shown us the undeniable: Africa is not just rising - it's thriving, innovating and redefining what's possible.<h2>Calling All Angels: Rise to the Investment Challenge</h2>We stand at a pivotal moment. To those on the outside looking in, this is your call to action. Renew Capital is backing startups and becoming part of a revolution that’s redefining supply chains and creating jobs. We are investing in the innovators who are shaping Africa’s tomorrow.It’s time to transcend the old ways of nepotism and cronyism. To those successful African entrepreneurs and investors, investing in innovation is investing in a legacy that will endure. Political leaders and decision-makers, the resources at your disposal have the power to ignite change or stifle potential. The choices you make today will echo through the annals of history.<h2>Our Pledge: Renew Capital’s Largest Investment Offering</h2>In the coming weeks, Renew Capital will unveil its most diverse and comprehensive investment package to date. We are selecting up to 20 tech-enabled startups from a pool of talent that spans 10 countries and 8 sectors. These startups are not just businesses; they are beacons of hope and progress.Our commitment goes beyond capital. We provide a scaffold of training and coaching that prepares these startups for the journey ahead. We’re calling on investors who are ready to be part of something transformative. Join us. Invest with intention. Let’s write history together.If you’re ready to rise to this challenge and back the next generation of African entrepreneurs,&nbsp;<a href="https://www.renewcapital.com/apply">apply now to Renew Capital Angels™.</a> After submitting the 2-minutes application, accredited investors will have access to our largest investment opportunity to date. We will be sharing more in our Renew Capital Angels Members’ Call on Wednesday, November 15, so be sure to submit your application before then.The time to act is now. Be a part of this landmark shift in how the world engages Africa. Your involvement is not just an investment in a company; it’s an investment in the future of a continent on the rise.<h2>The Future Awaits. Let’s Build It Together</h2><img src="https://lh7-us.googleusercontent.com/Uv9vJEC-PzrRb-zP5GZzBD6OS08lpKlXjf8QRer6mFYHMoAPcA2-xMvOojQGTgef_n0kF9YAcsfuCK8CcZzUigHHJbm6f3j3eutEQs1d26RHPMbs-JAUFSfdUxfN2N39fSxnRbNmZncMch6qz5oaUZo" alt="Renew Capital's upcoming investment package featuring up to 20 early-stage companies from 10 countries and eight sectors, highlighting the firm's commitment to investing in Africa. "><h2>Here are some interesting facts about Africa:</h2><ul><li>Venture Capital Funding: In 2022, Africa raised $5.2 billion in venture capital across 786 deals, accounting for 3% of the total volume and 1.2% of the total value of global venture funding. Despite a global downturn in venture capital,&nbsp;<a href="https://www.avca.africa/data-intelligence/research-publications/2022-venture-capital-in-africa-report/#:~:text=Africa%20raised%20US%245,US%2450%20million%20compared%20to%202021">Africa's market remained relatively stable</a>, with only a slight decrease in funding compared to the previous year​​. However, it is important to note that the majority of these transactions were relatively small, with&nbsp;<a href="https://www.brookings.edu/articles/figures-of-the-week-venture-capital-trends-in-africa/#:~:text=However%2C%20the%20majority%20of%20VC,in%20the%20United%20States">65% of VC deals attracting less than $5 million</a> in investments​​.</li><li>Urbanization Trends: Africa is experiencing a significant urbanization trend. While its population has been largely rural, the continent is now driving urbanization at&nbsp;<a href="https://www.dw.com/en/africa-drives-global-urbanization/a-65653428#:~:text=05%2F17%2F2023,This%20is">a pace similar to Asia's in previous decades</a>​​. Sub-Saharan Africa, in particular, has seen a consistent increase in its urban population, with a&nbsp;<a href="https://www.macrotrends.net/countries/SSF/sub-saharan-africa-/urban-population#:~:text=Sub,as%20defined%20by%20national">3.92% rise from 2020 to 2021</a>​​. This urbanization is significant as it often correlates with increased economic activity and can provide a fertile ground for startups and investors.</li><li>Projected Growth in VC Investment: There was an expectation that VC investment in Africa would sharply increase to between $3.8 billion and $4.7 billion in 2022, with projections reaching up to&nbsp;<a href="https://www.statista.com/chart/24911/vc-investment-by-country-in-africa/#:~:text=In%202022%2C%20VC%20investment%20is,investment%20in%20Africa%20is">$6.8 billion by 2023</a>​​. However,&nbsp;<a href="https://restofworld.org/2023/african-startups-vc-funding-decline/">a decline in venture capital funding</a> in the African tech startup ecosystem has been observed in 2023, which has raised concerns among entrepreneurs and investors about the potential stagnation of the sector if the funding does not meet the needs of growing companies​​.</li><li>Emerging Opportunities and Sectors: The technology sector in Africa is burgeoning, and there is a growing acknowledgment that venture capital can support the expansion and innovation of tech startups on the continent. Moreover, the agriculture technology sector is seen as a&nbsp;<a href="https://www.caban.co.za/venture-capital-opportunities-in-africa-in-2023/#:~:text=Top%2010%20Venture%20Capital%20Opportunities,improve%20agricultural%20productivity%20in%20Africa">promising area</a> where venture capital can address food security issues and improve agricultural productivity​.</li><li>Unicorn Status Achievements: The rise of significant startups is underscored by achievements such as unicorn status, with MNT-Halan becoming Africa's first unicorn of 2023 and Egypt's first unicorn after raising&nbsp;<a href="https://techpoint.africa/2023/03/15/african-venture-capital-funding-in-february-2023/#:~:text=Egypt%20was%20by%20far%20the%20country%20that%20got%20the%20most%20funding%20%E2%80%94%20%24437%20million%20%E2%80%94%20due%20to%20MNT%2DHalan%27s%20%24400%20million%20raise.%20South%20Africa%20followed%20in%20second%20place%20with%20%24173.7%20million%2C%20while%20Nigeria%20(%2436%20million)%20and%20Kenya%20(%2415.8%20million)%20rounded%20up%20the%20top%20four.">$400 million</a>​.</li></ul>This summary is intended for informational purposes only, is subject to change, and does not constitute investment advice or a recommendation to you. This summary is not intended as an offer to sell or a solicitation of an offer to buy an interest in any company (a “Company”) managed by Renew Capital or its affiliates. Such an offer to sell or solicitation to buy an interest in a Company may be made only by the delivery of subscription agreements relating to such Company and specifically delivered by Renew Capital to the recipient thereof. Investment in a Company is open solely to “accredited investors” (as defined by the SEC under the Securities Act of 1933, as amended) and, in addition, is intended only for sophisticated investors who meet the investor suitability requirements described in the subscription agreements and who can bear the risk of investment losses, including the potential loss of their entire investment.Investments with Renew Capital are speculative in nature and involve a high degree of risk. The Renew Capital Angels invest in companies located and doing business in sub-Saharan Africa. Investors should understand and be willing and able to handle the risks of investing in such frontier markets, which are more significant than the risks associated with investing in securities of U.S. companies or in other developed countries and include the risk of total loss of an investor’s entire investment.

After living and investing in Africa for more than a decade, co-founders Matt and Laura Davis believe we stand at a pivotal moment. 

Uganda.JPG

Embracing Africa's Startup Revolution

<h1>Reframing Impact Investing in Africa</h1>The Ethical Leadership and Sustainability ParadoxFor many investors worldwide, the African market holds enormous potential for both impact and profit. The rise of impact investing – investments made with the intention of generating a social or environmental impact alongside a financial return – has been particularly pronounced. However, there's a heated debate about whether the current application of impact investing in Africa is creating unnecessary burdens on companies that are already dealing with a plethora of challenges inherent to the environment.The prospect of a double bottom line, one that measures both financial and social or environmental outcomes, is undeniably appealing. Yet, it’s vital to recognize the unique context of African economies where establishing and maintaining a business is already a Herculean task. Balancing the drive for profitability and impact may not always be practical in such a setting and could potentially distract entrepreneurs from their primary goal of building sustainable, scalable businesses.<figure class="image"><img src="/uploads/Image_ee6bbbe9cb.png" alt="Coffee being carefully prepared and selected at METAD's specialty coffee farm in Africa"></figure>Consider the example of METAD, a flourishing specialty coffee company in Africa. METAD’s leadership channeled a portion of its profits towards community upliftment initiatives such as financing NGO-led cervical cancer testing for women, building community centers and funding teachers. These initiatives were not the outcome of investor pressure, but rather a strategic and smart way to operate in the African business environment. Amid regional unrest, METAD's farms were protected by the communities they had invested in, reflecting the mutual benefit of this approach.&nbsp;Impact investing has to be sensitively calibrated to align with the specific realities of the African market. A 'one-size-fits-all' global approach might not always be effective or sustainable. Investing in ethical leaders who prioritize community well-being and environmental sustainability could also be another way to look at impact investing. Leaders need to understand the intricate social fabric and unique environmental constraints of their locales to steer their businesses toward holistic prosperity.Moreover, investors should be cautious of not overburdening African enterprises with impact requirements. Investing in these companies should be coupled with providing necessary training and resources, focusing on building strong business fundamentals that can ensure their growth. The mere act of creating sustainable jobs can have a ripple effect of positivity in communities that are often plagued by unemployment and poverty.Redefining impact investing in Africa may not necessarily mean discarding the current model entirely. It is more about adjusting the balance — prioritizing the creation of growing businesses that implicitly, through their operations, contribute to the social and environmental well-being of their communities. Let us celebrate and incentivize the leaders who are already making a significant impact through their commitment to ethical, sustainable businesses.

Redefining impact investing in Africa may not necessarily mean discarding the current model entirely. It is more about adjusting the balance ...