The COVID-19 pandemic laid bare the world’s deepest inequalities with women and people of color in the United States bearing the heaviest burdens of both the disease and economic impact of restrictions designed to contain its spread. As a global business based in the United States with operations in three east African countries, RENEW was uniquely positioned to see the full scale of the crisis and show the world how socially responsible businesses can lead in the post-pandemic world.
Founded in 2005, RENEW brings investment capital to eastern African countries where it also trains managers, advises on policy, and advocates for women’s economic empowerment. RENEW started as an idea among DC consultants with connections to Africa. They believed that directly funding and training people to build and manage businesses themselves was the best way forward to sustainable development. The founders envision a vibrant private sector across the African continent, and with plans to open new offices in 20 countries in the coming years, the future they are working toward may not be far off.
Managing Partner Laura Davis explained their theory of change was to address the root causes of humanitarian crises by seeding and growing middle-market enterprises that play their part to lift whole economies out of poverty.
“We see that many NGO’s mostly pull people out of the proverbial flooded river, saving them from war, famine, disease, and persecution,” Davis said. “This is good work, and it is absolutely necessary work, but there also has to be a group that goes upstream to see why people fall into the river in the first place. RENEW provides the upstream response by organizing investor networks in the US and connecting them with companies we find and support through our network of exchanges in Ethiopia, Uganda, and Rwanda.”
RENEW has a four-part program to build out the middle market where it operates. At the first step, in physical spaces called “Exchanges”, RENEW provides policy advice, management training, and partnerships to develop the local private sector. From there, local investment up to $150,000 funds ecosystem development and media programs which lead to the next level of impact investment from risk capital provided through angel investor networks. This supports pipeline for blended finance vehicles that further management training and provide growth capital typically between $1 million to $3 million in middle-market investments. To date, RENEW’s programs have attracted investments totaling more than $35 million of debt and equity into portfolio companies in East Africa that support more than 13,000 jobs and smallholder farmers. Significantly, 75 percent of those jobs were held by women.1
Gender equality is core to RENEW’s mission. According to its most recent impact report, “[RENEW’s] long-term goal is for women entrepreneurs to be empowered in the private sector and no longer have to choose between their careers or their families, thereby helping shape East Africa’s entrepreneurial ecosystem to seed a gender-smart economy.” RENEW supported women entrepreneurs throughout the pandemic through its Resilience and Contingency Planning Training program which trained the business community members to plan for and navigate uncertainty. In 2021, in partnership with the Alliance for a Green Revolution in Africa (AGRA), RENEW launched the African Resilience and Investment Series for Executives. This program focused on teaching women executives the precepts of corporate leadership through strategic planning and governance.
RENEW’s investment in the Ethiopian textile manufacturer Desta is one example of how an investment can empower entrepreneurs to lead socially responsible businesses. RENEW’s angel network invested in Desta in 2015 and provided support to the company including supporting its focus on giving back to the community. When textile orders dried-up as the pandemic took hold of the global economy, Desta’s management pivoted and produced and distributed over 150,000 face masks in Butajira and Addis Ababa. Factories turned into nodes in the nation’s public health network where workers and their families could learn COVID-19 safety protocols and obtain healthcare and clean water.
Running a global investment network and business development operation supporting critical work like Desta’s during the pandemic was never easy.
“It was important to us that our bank shared our perspective, not only on the importance of business development in and of itself, but also in terms of how business growth can have a positive social impact,” Davis said. “Amalgamated Bank is rare among commercial banks for prioritizing banker-client relationships. Being able to pick up the phone and talk with someone directly takes some of the complexity out of operating a global company.”
Amalgamated Bank’s Emily Robichaux serves as RENEW’s principal banker. “Amalgamated Bank shares RENEW’s wide-angle focus on socially responsible investing. We support RENEW’s mission as a bank and from our mutual belief that the business case for socially responsible investing is the path toward economic justice on a global scale.”