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Overcoming an Outdated Narrative: Why Investors Need to Recognize Africa’s True Potential
Many Western people have an outdated view of Africa, defined by senseless wars, poverty and disease. As Cameron Khosrowshahi and Emily Langhorne at USAID INVEST point out, this worldview even permeates the financial sector, causing investors to overemphasize risks and overlook opportunities that could benefit both investors and African nations. They provide a necessary corrective in this article, urging institutional investors in particular to embrace these opportunities.
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- Investing
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Revenue Over Rounds: Why We Should Encourage Entrepreneurs to Focus on Revenue Before Fundraising
Before the fallout from coronavirus, 2019 was a banner year for startup investment in Latin America. But Daniel Cossio at Village Capital cautions that Silicon Valley-levels of funding could incentivize startups to scale too big, too fast — leading to high-profile failures. He urges investors and entrepreneurs to resist the growth-at-all costs mentality and come up with an alternative definition of startup success.
- Categories
- Investing, Social Enterprise
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From the Valley of Death to a $14 Million Series A: Sokowatch, Quona and the Role of Philanthropic Capital
The e-commerce company Sokowatch recently raised a $14 million Series A round, enabling it to expand its digital financial services to more merchants in Africa. But just two years ago, the company was in danger of going under. Malika Anand and Maelis Carraro at BFA’s Catalyst Fund discuss how the fund's philanthropically-funded acceleration approach has helped Sokowatch – and other promising fintech startups – survive the “valley of death” and position themselves for commercial investment.
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Unlocking Off-Grid Energy Finance: What Options Are Available for the Last Mile?
Extending the power grid to underserved communities is often prohibitively expensive. That's why decentralized renewable energy (DRE) is increasingly recognized as an essential approach. However, investments remain focused on grid-connected electricity, with only 1.2% directed towards DRE solutions in 2017. Surabhi Rajagopal and Eco Matser at Hivos explore challenges and solutions in financing energy access through DRE.
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The Clock is Ticking on Energy Access: Exploring Factor[e] Ventures’ Big Bet on Mini-Grids
Since 2010, the number of people without energy access has decreased from almost 1.2 billion to 840 million. But while that's encouraging, the world is not on track to meet SDG7’s goal of universal electrification. What's more, as Amanda DelCore at Factor[e] Ventures points out, more connections may not always equal more access. In light of these realities, she explores why Factor[e] has built its energy access thesis around mini-grids.
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Making Subsidies Smarter: How to Create More ‘Bang for the Buck’ in Blended Finance
Blended finance can be a powerful approach to closing the SDG financing gap – and as Bjoern Struewer at Roots of Impact argues, it inevitably involves subsidies. But for those subsidies to be worthwhile, they must be provided in return for tangible development impact – and not eaten up by the cost of maintaining complex financial structures. Struewer explores how subsidies should be leveraged to maximize the impact of blended finance.
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- Investing
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Finding the Right Asset Manager for Sustainable Investing: A Guide for Due Diligence
More than a quarter of assets under management worldwide are invested in sustainable strategies, prompting asset managers to expand their sustainability-related services. But though this growth is encouraging, analysts at the Investment Integration Project caution that it remains hard to determine which asset managers are providing the best sustainable investment services, and which approach is the most effective. They share insights from a new report that aims to answer those questions.
- Categories
- Investing
- Tags
- ESG, impact investing
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Africa’s Tech Startup ‘Investment Frenzy’: Fact, Fantasy – or a Wakeup Call for Better Investing Strategies?
Are Africa's tech startups really facing an "investment frenzy" that's driving excessive valuations, growth-at-all-cost business models and unrealistic investor expectations? That was impact investor Lauren Cochran's argument in a much-discussed NextBillion article. But according to Marsha Wulff at LoftyInc Capital Management, the problem isn't an excess of funding – it's "group-think" among foreign investors who don't see the true value of local, African-led startups.
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- Investing