Renew Capital, a venture capital firm with roots in private equity, is pivoting its investment strategy toward West Africa after retreating from Ethiopia’s export-oriented market. The firm plans to inject between $50,000 and $500,000 into over 40 tech-enabled and asset-light businesses within the next year, marking a significant expansion into the region. CEO Matt Davis made the news public in a recent interview with TechCabal. “We spent a decade doing private equity in Ethiopia, and it didn’t yield the results we hoped for. After a lot of hard lessons, we’ve had to rethink and reshape our investment model,” Davis, said. The firm’s entry into West Africa begins with an investment in Affinity, a Ghanaian digital bank, which signals Renew Capital’s commitment to the region. “We believe that the Affinity deal is a gateway for us in West Africa,” noted Chudi Ofili, Renew’s investment manager for West Africa. Renew Capital currently manages two funds: a $6 million angel syndicate and a $15 million follow-on fund. The angel syndicate underpins an accelerator program that provides startup executives with critical management training, digital marketing, and fundraising support. Startups that meet Renew Capital's benchmarks during the accelerator are eligible for follow-on funding of up to $4 million. “We typically invest $150,000 on average into a high volume of startups,” Davis explained. The firm anticipates enrolling around 50 startups into the accelerator, with only 20% advancing to receive follow-on investments, which average $1.5 million per startup. In addition to its startup investments, Renew Capital collaborates with foreign governments, including those of Canada and the United States, to foster investment in Africa. “We’re passionate about transforming the global perception of Africa from a place of charity to a hub of investment opportunities,” Davis emphasized. As part of this mission, the firm hosts foreign investors in Africa, offering them an immersive experience to change their perspectives on the continent's investment potential. “They often have no idea what’s happening here, so we bring them over for a week. It helps us shift their mindset about investing in Africa,” Davis added. Renew Capital’s strategic pivot to West Africa is set to redefine its role in the continent’s venture capital landscape, positioning it as a key player in the growth of tech startups in the region.
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