RENEW Strategies

The Angels Return

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Matthew Davis, CFA
| July 26, 2013

We recently hosted another group of impact angel investors here in Addis Ababa, and I thought it would be good to continue with our tradition of sharing some about their time here.

First, a quick recap of what RENEW is doing: RENEW is implementing a new model for how the West can engage Africa. Rather than the traditional model of aid and charity, RENEW’s model uses the West’s capital to invest in high-quality local companies. It is important to clarify that these are profit-oriented investments…not grants, aid or free money of any kind. By applying a market-based strategy that is more appropriate to the realities on the ground here in Africa, local companies will not only create jobs and pay taxes, but provide good returns to investors. This strategy is shaped by three trends RENEW sees happening in Africa and the West. These are:

  1. The rise of angel investors versus venture capital funds as a way for wealthy investors to use their capital to support higher risk investments
  2. The potential of SMEs in Africa, and the rise of the African middle class and private sector
  3. The formalization of impact investing as a more favorable mechanism to create sustainable impact

After a year of rolling this strategy out in Ethiopia, we feel we accurately predicted the market. We recently helped close our first angel group investment in a local energy company, and we have a number of deals scheduled to close this year.

This year RENEW has hosted over 25 investors from the West in Ethiopia. We have formalized partnerships with two funds and have closed our first investment. We have a number of investments we are in the process of closing for other angel groups that are forming across the U.S. and Europe.

This trip was a little unique because one of the members was a return investor, and the trip was focused on the coffee value chain. We looked at companies along almost the entire supply chain of coffee and it was an eye-opening experience. Here’s the rundown:

We had…

  • Site visits with five local companies
  • One trip to Yirgechaffe – one of the most well-know coffee farming areas in the country
  • A tour of the largest coffee processing factory in Ethiopia
  • A reception where entrepreneurs from over 20 businesses had a chance to socialize with investors, and we counted at least two business-to-business deals take place
  • A trip to Lalibela and Gondor

There were five investors in the group (excluding the RENEW team), all with various backgrounds including medicine, fund management, entrepreneurship and financial management. Most had skills that spanned multiple industries. Some had extensive experience traveling in Africa. Some had not visited for years; others make regular trips. Needless to say, all of this offered us hours of discussions in the car between meetings, and stories in the evenings over dinners.

The results...
In the end, we got strong commitments to move forward on some opportunities. There’s a lot of work to be done, but overall the trip was a huge success.

Contact us at or follow us on Twitter @RENEWLLC to find out more.