Investors are failing African entrepreneurs — it’s time for a change

February 25, 2021 by  
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Investors are failing African entrepreneurs — it’s time for a change Salma Okonkwo Thu, 02/25/2021 – 00:10 Despite the global economic slowdown caused by COVID-19, the case for investing in Africa is stronger than ever. Africa will remain a competitive investment destination for decades to come because of its improving relative risk profiles, regional integration and strong economic fundamentals. However, many challenges remain for local founders despite the record -breaking fundraising year African startups had in 2019. This is especially the case when it comes to women-led companies. The energy sector will be critical for Africa’s post-COVID economic recovery and will be one of the most attractive investment sectors in 2021. Stakeholders ranging from the African Development Bank to large-scale private funds recognize the need cost-efficient industrial energy access as well as universal household electricity. To expand the impact of their investments in the energy sector, development finance institutions (DFIs) and private investors should pay more attention to empowering African-led energy firms by adjusting their risk analyses and to closing gaps for off-grid solar project financing. Representation of local African founders, and female founders, remains a challenge in the African startup funding space. While it is a positive sign that African companies are attracting international investors’ attention, only 20 percent of private investment into African startups and companies came from Africa-based investors during the last five years. Further, eight of the top 10 African startups that attracted the most capital in 2019 were led by foreigners. These figures get more concerning when considering the number of women-led or co-founded startups in Africa. Although 25 percent of all sub-Saharan African women are engaged in early-stage entrepreneurial activity, women-led startups receive a fraction of the investments compared with their man-led counterparts. This year’s projected drop in funding for African startups is a perfect opportunity for the investment community to reflect on these trends and make changes for the coming surge of financing needed for the post-COVID recovery. The economic recoveries of African economies are underway , and investors can take advantage of strong positive economic trends that existed pre-COVID to invest in strategic sectors such as energy. Investing in African markets always has been associated with risk , but now the COVID-19 pandemic has made safe markets risky, and traditionally risky markets look attractive. Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. From China to the U.S ., geopolitical crises already were stressing major economies, and COVID accelerated this trend. Now, investors are increasingly looking elsewhere for stable returns and reassessing their risk profiles. Compared to traditional markets, Africa is young , connected , entrepreneurial and poised for immense growth through regional integration via the African Continental Free Trade Agreement (AfCFTA), which will create the world’s largest free trade area. Renewable energy is a priority sector for Africa’s post-COVID recovery because small and midsize enterprises need reliable and clean energy to get back to business and continue growing. Over $200 million in funding last year went to energy sector startups. Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. The importance of off-grid and mini-grid projects will only grow as they are the most cost-effective way to bring hundreds of millions of Africans without electricity online and reinforce power supplies for businesses. DFIs and investors should prioritize supporting African-led renewable energy companies to achieve stable returns, close the energy access gap and elevate African founders. Despite expanding programs for solar energy financing, outdated risk analyses keep critical funding out of the hands of African entrepreneurs. Some of the largest off-grid solar companies in Africa are co-founded and backed by Western CEOs and investors. Thinking that local African firms with market expertise cannot deliver the same returns with the same, if not better, risk profiles are outdated. More developed economies do not have a monopoly on talent either. African talent, combined with recruited international talent, can result in world-class teams to lead companies capitalizing on the African solar opportunity. Africa’s off-grid solar sector represents a $24 billion annual opportunity, and the continent faces a significant energy gap. DFIs can serve as bridges between the private sector and governments by expanding credit enhancement services to hedge against project risk. These institutions already have several tools at their disposal to help investors hedge against risk, including credit and political risk guarantees, and serving as lenders of record for project financing to secure favorable loans using their preferred credit status. Promoting technology transfer and local content is a stated priority of DFIs. The best way to accomplish these objectives is by supporting African companies in securing investment. The golden age of African investment is just beginning. However, real developmental impact in critical sectors such as solar energy cannot occur without local empowerment and African firms taking a leading role. Investors are running out of excuses: African companies can be competitive, profitable and world-class when given the support they merit from capital markets and DFIs. Pull Quote Off-grid solar projects in Africa consistently have outraised their competitors in other countries, making Africa the leading global destination for off-grid solar investment. Topics Renewable Energy Africa Entrepreneurship Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Solar panels in the African country of Zimbabwe. Photo by Shutterstock/Sebastian Noethlichs

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Investors are failing African entrepreneurs — it’s time for a change

Let me drone on a moment about drones for agriculture or forestry

February 25, 2021 by  
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Let me drone on a moment about drones for agriculture or forestry Heather Clancy Thu, 02/25/2021 – 00:05 As more corporate sustainability teams cultivate projects to restore biodiversity and degraded landscapes or to nurture soil carbon sequestration and other nature-based climate solutions, interest in drone technologies that can weed out the best opportunities is flourishing. In early February, DroneDeploy, which has an active forestry practice, closed $50 million in late-stage venture funding. That brings its total backing (so far) to $142 million, more than any other drone data and software company. One declared use for this latest infusion of money is acquisition targets, which isn’t surprising given the anticipated boom in commercial drone usage: One forecast provides revenue related just to ag drones will reach about $5.9 billion by 2026 , a compound annual growth rate of close to 30 percent over the next five years. “The health, economic and workforce pressures of the last year have accelerated the adoption of drones and drone data by asset owners,” noted John Trough, managing partner of Energize Ventures, which led the DroneDeploy round with AirTree, in a statement. “We anticipate continued growth as industries expand their use of visual data to streamline operations.” One example of how DroneDeploy is being used for sustainable agriculture — its customers have so far mapped 55 million acres — is its new relationship with Corteva Agriscience , which apparently owns one of the largest ag drone fleets in the world with more than 600 at its command. As part of the pact, DroneDeploy is licensing the artificial intelligence and machine learning software that Corteva uses to detect crop issues at an early stage of emergence.  Another drone company more explicitly focused on land restoration is Dendra Systems, which is working with mining companies including BHP, Glencore and Rio Tinto to clean up and restore degraded habitats. One of the company’s jaw-dropping claims: 10 of its drones, flying in a swarm, can plant up to 300,000 trees per day, compared with 2,000 that could be propagated using “traditional” methods. It figures that up to 25 percent of the Earth’s land has been degraded, a datapoint it aims to reduce. Dendra raised $10 million in Series A funding in September from investors including Airbus. It owns and operates its own fleet — its corporate customers hire its services for analysis or seeding applications — and uses artificial intelligence and high-resolution data capture to map land and come up with a restoration plan that takes into account a region’s unique biodiversity needs. According to the company, which has roots in the U.K. and Australia, it can identify up to 120 species of flora and fauna from its aerial vantage points. I asked Dendra CEO Susan Graham how a corporate sustainability organization might use her company’s services. “Companies that have restoration goals could financially sponsor initiatives with local communities, NGOs and other land managers and onboard Dendra as the technology partner to support the environmental managers and accelerate the restoration efforts,” she responded via email.  Graham added that the systems also can provide a good check on those investments. “Our systems enable financial sponsors to monitor the outcomes of their investment closely across multiple projects, ensuring it is on track to meet objectives, as well as exhibiting accountability and transparency to stakeholders. The information we provide is key to determine where to invest in restoration and the value you get from doing that.” Glencore, a customer since 2018, notes that one of the biggest benefits of using the drones is their ability to navigate and gather intelligence about remote or hard-to-reach landscapes. One site where Dendra’s technology is being used actively is Lord Howe Island, off the coast of New South Wales, where the drones are helping eliminate invasive species including rodents and weeds such as cherry guava, sweet pittosporum and ground asparagus, which can outcompete native plants for nutrients.  “Dendra Systems is bringing new technology to the island which is significantly accelerating the rate at which we can identify invasive weeds that threaten our natural fauna and degrade habitats,” noted Sue Bower, flora and weed management officer with the island’s board. “This project will help build Lord Howe Island’s ecological resilience in the face of a changing climate.” There are many commercial drone companies, of course. Aside from Dendra and DroneDeploy, two other organizations with an explicit focus on agriculture, biodiversity or habitat management are Sentera , which supports agronomists, seed dealers and growers, and AgEagle Aerial Systems , which gathers crop information and even has a specialized service for hemp growers. I’d love to know about others that would be of interest to the GreenBiz community. You can email suggestions to heather@greenbiz.com . Pull Quote Our systems enable financial sponsors to monitor the outcomes of their investment closely across multiple projects, ensuring it is on track to meet objectives, as well as exhibiting accountability and transparency to stakeholders. Topics Information Technology Food & Agriculture Forestry Drones Featured Column Practical Magic Featured in featured block (1 article with image touted on the front page or elsewhere) Off Duration 0 Sponsored Article Off Dendra drones in action. Image courtesy of Dendra Systems

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Let me drone on a moment about drones for agriculture or forestry

Air pollution could increase risk of irreversible blindness

January 27, 2021 by  
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A study published in the British Journal of Ophthalmology has revealed that exposure to air pollution increases the risk of blindness in older adults. The study found that small increases in air pollution contribute to the occurrence of age-related muscular degeneration (AMD), a condition that causes irreversible blindness. The study, conducted in the U.K. with data of more than 115,000 participants, shows that tiny pollution particles increase the risk of AMD by 8%, while changes in large particle pollution increase the risk by 12%. “There is an enormously high flow of blood [to the retina] and we think that as a consequence of that the distribution of pollutants is greater to the eye than to other places,” said Paul Foster, professor at the University College London and a researcher behind the study. “Proportionately, air pollution is going to become a bigger risk factor as other risk factors are brought under control.” Related: How clean is your indoor air? Today, AMD is the leading cause of irreversible blindness in developed countries. The disease mainly affects people above the age of 50 but may also affect younger individuals. Over 200 million people around the world have been diagnosed with AMD. In the U.K. alone, about 5% of people over the age of 65 have AMD. Although air pollution is not among the biggest risk factors for this condition, worsening air quality might make things worse in the future. Currently, the biggest risk factors include poor physical health , particularly smoking. “It’s important to keep things in context — people shouldn’t be looking outside their door and thinking: ‘I can’t go out because it is polluted out there,’” Foster said. “The study gives people information that they can use to alter their lifestyle choices. For example, it may be another reason why we might consider going for an electric car , instead of buying a diesel.” The researchers are planning to conduct another study that will determine the impact of indoor air pollution on eye health. + British Journal of Ophthalmology Via The Guardian Image via Cristi Goia

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Air pollution could increase risk of irreversible blindness

The impact of COVID-19 on corporate reporting

May 4, 2020 by  
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The global pandemic is affecting risk disclosures and engagement with shareholders in several important ways.

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The impact of COVID-19 on corporate reporting

Green bonds are growing bigger and broader

May 4, 2020 by  
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The variety of purposes has expanded beyond alternative energy to green building and sustainable-transport projects. And that’s just a start.

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Green bonds are growing bigger and broader

As sustainability becomes professionalized, all professions look for sustainability skills

May 4, 2020 by  
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GreenBiz’s 2020 State of the Profession report illuminates the hard numbers measuring career realities for sustainability leaders across all industries. Among other things, the data show shifts to more engaged CEOs, increased investor pressure and a boost in hiring of sustainability professionals among the surveyed companies. 

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As sustainability becomes professionalized, all professions look for sustainability skills

Could COVID-19 open the door for driverless deliveries?

April 14, 2020 by  
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The COVID-19 pandemic has put an incredible strain on global supply chains, from medical supplies to household goods, as spikes in demand stress-test logistics infrastructures. There is an opportunity for unmanned delivery vehicles to assist in addressing this demand and help to reduce the risk of spreading infection.

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Could COVID-19 open the door for driverless deliveries?

These are the climate risks the finance sector should be planning for

April 8, 2020 by  
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COVID-19 is a dry run for climate catastrophes.

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These are the climate risks the finance sector should be planning for

A clarion call for inventors and investors

March 28, 2020 by  
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Geoengineering and environmental technologies are the vaccines author Thomas Kostigen believes we need to cure the planet’s ills.

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A clarion call for inventors and investors

Business lessons from phase 1 of the COVID-19 pandemic

March 18, 2020 by  
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We are only in phase one of a pandemic that has changed the rhythm of daily life like no other recent event. Here are five lessons to guide us through these turbulent times and the uncertainties which lie ahead.

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Business lessons from phase 1 of the COVID-19 pandemic

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