Establishing the first blended finance instrument to invest in Ethiopian growth startups

10/1/2021

Background
The Ethiopian entrepreneurship ecosystem is not accurately depicted in the media. Yet, it is an ecosystem that is rich in its variety of innovation and quality of entrepreneurs. Despite the current abundance of liquidity supporting early stage entrepreneurs both through financial and technical resources, entrepreneurs are left to fall off a cliff post incubation programs.

Solution

Structure an instrument that can provide a continuum of support for growth startups
Adopt a blended finance approach where equity capital is predominant and technical assistance as de-risking mechanism
Conduct a thorough market-mapping of tech start-ups and high growth companies operating in Ethiopia to obtain a unique understanding -based on data- of the entrepreneurship ecosystem in Ethiopia.
Expose the instrument to a pipeline of investment opportunities outside of Ethiopia integrated to opportunities within Ethiopia, essentially building a multicounty instrument appealing to global investors
Promote and fundraise for the Fund

Outcome

Garnered strong interest from Development Finance Institutions and private investors.
Raised awareness with policy makers and more broadly in the ecosystem for the need to attract risk capital
Enticed more funds (VC, PE, CVC) to set up shop in Ethiopia, raising funds in hard and/or local currency- ensuring sustainability in the flow of capital in the ecosystem while lifting it up, and reducing dependency from grant funding.

More insights: click here
More details on the journey and objectives of the EF: click here

2 Comments

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5/25/2022 10:33:01 pm

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Establishing the first blended finance instrument to invest in Ethiopian growth startups

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