This post by Alexandra LaForge originally appeared on Investors' Circle's blog. You can read it here.
Shared Vision, Different Perspectives: Catalyzing Co-Investment into Early-Stage Impact Enterprises in Kenya
How can we better fund early-stage impact enterprises in Kenya? With growing interest from US impact investors and an emerging class of local angel investors, strategic collaboration may be the key.
How can we better fund early-stage impact enterprises in Kenya? With growing interest from US impact investors and an emerging class of local angel investors, strategic collaboration may be the key.
International entrepreneurial hubs like Kenya have become attractive targets for impact investors looking for financially viable and impact-generating investment opportunities. The Global Impact Investing Network (GIIN)’s “The Landscape for Impact Investing in East Africa” reports that at least $240MM USD has been deployed as impact investments in Kenya specifically, with more than half of an additional $2.5B USD committed to East Africa likely headed there as well (“The Landscape for Impact Investing in East Africa,” 6). With a focus on global health, the USAID-supported Social Entrepreneurship Accelerator at Duke (SEAD) convenes interdisciplinary partners to identify, develop, and scale the innovative impact solutions vying for this capital. As the partnership’s capital connection provider, Investors’ Circle organized Investor Days: Nairobi 2016 to bring six US-based investors to Kenya – four in Africa for the first time – to explore and assess early-stage global health and broader impact investment opportunities there.
In addition to site visits with local social enterprises, Investor Days: Nairobi 2016 attendees engaged with local investors representing a new and growing class of asset holders in Kenya. The fifth-largest economy in Sub-Saharan Africa, Kenya is expected to watch its millionaire (USD) demographic increase 74% in the next decade, at more than double the global rate (Ombok). As more Kenyans build wealth, some are moving from community-focused pooled giving and informal investment groups into early-stage venture investment strategies.
Despite a shared vision of early-stage investments that fuel social change and economic development in Kenya, it became apparent that US and local investors have different perspectives on impact interests and return expectations. What does this mean for catalyzing early-stage capital into Kenya? Is there an opportunity to collaborate or are these two groups fundamentally misaligned?
A closer look into US impact investor and local angel investor perspectives reveals that differing skills and needs could create a complimentary approach to early-stage investing in Kenya if intentionally engaged. At the end of this paper, we suggest actions that investors can take to understand potential cross-cultural investment collaborators, build investment skills and co-investment relationships, and move capital into promising Kenyan impact enterprises.
In addition to site visits with local social enterprises, Investor Days: Nairobi 2016 attendees engaged with local investors representing a new and growing class of asset holders in Kenya. The fifth-largest economy in Sub-Saharan Africa, Kenya is expected to watch its millionaire (USD) demographic increase 74% in the next decade, at more than double the global rate (Ombok). As more Kenyans build wealth, some are moving from community-focused pooled giving and informal investment groups into early-stage venture investment strategies.
Despite a shared vision of early-stage investments that fuel social change and economic development in Kenya, it became apparent that US and local investors have different perspectives on impact interests and return expectations. What does this mean for catalyzing early-stage capital into Kenya? Is there an opportunity to collaborate or are these two groups fundamentally misaligned?
A closer look into US impact investor and local angel investor perspectives reveals that differing skills and needs could create a complimentary approach to early-stage investing in Kenya if intentionally engaged. At the end of this paper, we suggest actions that investors can take to understand potential cross-cultural investment collaborators, build investment skills and co-investment relationships, and move capital into promising Kenyan impact enterprises.
The research described above was produced as part of the Social Entrepreneurship Accelerator at Duke (SEAD), in collaboration with the Center for the Advancement of Social Entrepreneurship at Duke (CASE), Innovations in Healthcare, Investors' Circle and funded by USAID.
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