In a venture capital landscape often dominated by nine-figure funds and unicorn-hunting in Africa’s major tech hubs, impact investment firm Renew Capital is carving a different path. A look at its 2025 annual report reveals a strategy that prioritizes meticulous, ground-up ecosystem building and a focus on the continent’s “missing middle” — a strategy where the power lies in the details, not the headlines.
With $12.6 million invested since 2012 across 52 companies, Renew Capital’s numbers might seem modest at first glance. However, the firm’s real story is one of leverage and deliberate, targeted growth.
The “Small Cheque, Big Leverage” Model
The most telling figure in Renew Capital’s report the average investment size of its portfolio companies: $202,228. This positions the firm squarely in the “missing middle” — a critical funding gap for businesses that have outgrown microfinance but are not yet large enough to attract traditional venture capital or private equity.
This relatively small cheque size belies its catalytic effect. Renew Capital reports that its portfolio companies have gone on to attract more than $73 million in subsequent financing. This represents a leverage ratio of nearly 6:1, suggesting that Renew’s initial investment and support serve as a crucial validation for other investors, de-risking the assets and paving the way for larger growth rounds.
The model is fuelled by a network of over 230 investors, primarily composed of angel investors, foundations, and family offices, who are often aligned with the firm’s dual mandate of achieving financial and social returns.
A Geographic Strategy Beyond the ‘Big Four’
While many Africa-focused funds concentrate their firepower on the “big four” markets of Nigeria, Kenya, South Africa, and Egypt, Renew Capital’s portfolio distribution reveals a more diversified, pan-African approach.
According to its latest data, the firm’s largest portfolio concentrations are in:
- Ethiopia (15 companies)
- Kenya (15 companies)
- Uganda (7 companies)
- Morocco (3 companies)
This deliberate focus on less saturated markets points to a strategy of seeking out undervalued opportunities and avoiding the high-valuation, competitive environments of major hubs. The data on their pipeline further illuminates this approach. While Nigeria saw the second-highest number of applicants to its Renew Venture Lab (350), it has no portfolio company there yet. This disparity between application volume and investment selection indicates a highly disciplined and thesis-driven process, rather than simply following market hype.
Building a Pipeline, Not Just Writing Cheques
Renew Capital’s investment strategy appears to be deeply integrated with its ecosystem-building activities. The firm doesn’t just wait for deals to arrive; it actively cultivates them.
The Renew Venture Lab, a preparatory program for prospective investments, has received over 2,800 applications. Furthermore, more than 6,550 individuals have participated in management training programs through the Renew Capital Exchange.
This extensive, continent-wide funnel serves two key purposes:
- De-risking: It allows the firm to vet and train a vast pool of entrepreneurs over time, providing deep insight into their capabilities and business models long before an investment is made.
- Market Intelligence: It provides invaluable, on-the-ground data about emerging trends, challenges, and opportunities across dozens of African markets.
Measuring Impact
As an impact investor, Renew Capital places a strong emphasis on social returns alongside financial ones. The firm reports that its portfolio companies have created over 2,900 jobs and supported more than 4,540 jobs since the time of investment.
Notably, women account for 74% of the jobs created and 69% of the jobs supported. While the firm transparently notes that these figures are based on unaudited, high-water-mark reports from its companies, the numbers underscore a clear commitment to gender-inclusive growth as a core pillar of its investment thesis.
In a continent brimming with potential, Renew Capital’s 2025 report showcases a quiet but potent strategy. By combining modest cheques, significant leverage, broad geographic diversification, and deep pipeline development, the firm is demonstrating a different way to win in Africa — one built not on chasing unicorns, but on methodically cultivating a resilient and impactful forest of sustainable businesses.
Recently, the firm launched Renew Venture Lab 2 (RVL2). This $10 million fund, dedicated to nurturing early-stage tech startups across the continent, has quickly gained traction among its investor network and shows great promise in fostering innovation and growth for ambitious African entrepreneurs.
The initiative offers a comprehensive support system to drive startups toward success. This includes not only pre-seed investments ranging from $50,000 to $300,000, tailored to each startup’s needs, but also bespoke training sessions focused on refining business strategies, enhancing pitch delivery, and providing valuable market insights.