Fostering economic and social growth for African businesses

Senior Alexander Asante and his team KolaNut Investments are heading into Keller Center’s eLab Accelerator this summer. Their initiative is an investment firm with a social mission of creating jobs and wealth in their home countries in Africa. We asked Alexander how this idea of a socially conscience investment firm came to light and how he formed his team.

I am a senior in Electrical Engineering from Accra, Ghana; Hannington Omwanza is an Economics major while Chege Gitau is a Computer Science major, and they are both from Kenya. I first met Chege and Hannington during the International Orientation organized by Princeton’s Davis International Center, where we connected based on our African origins. Besides occasionally working together with either Hannington or Chege in mutual classes, mostly mathematics, economics or computer science, we met routinely every Saturday during the famed brunch at Whitman College.

In our sophomore year during one of our brunch conversations, it was evident that we were all very keen about making some social impact in our respective countries. Chege had developed Kenyans Applying to US Universities to guide brilliant Kenyan students in accessing top universities in the United States. I had just returned from summer in Accra, Ghana where I helped further the construction of a sustainable high school after obtaining funding from the Director of the Program in African Studies, Carolyn Rouse. Hannington had spent the summer teaching English grammar to adults in underserved communities in Tanzania through the Princeton in Dar Es Salaam program. The biggest problem that we all faced was access to capital to fund these social missions.

Later that year, Hannington and I were having lunch with three friends who are investment enthusiasts, and the question of the average rate of return of investments in the US came up in the conversation. Hannington and I knew of many investment opportunities within our respective countries with higher yields. We quickly realized that we could fund our social impact projects by using our knowledge of the landscape and connections within the continent to enable US investors to access these high yield industries. We could provide gains above the US average and use the remainder of the return to fund social impact projects. Moreover, we noticed that our investments would also contribute to the creation of jobs while increasing the positive impact of foreign direct investments in African countries.

One of the biggest problems with charity donations, especially to worthy causes within the African continent is that they are usually one-off and typically require someone or a group to feel generous again and provide another round of funding to support the cause. This charity model is not sustainable and often results in malign dependency. At KolaNut Investments, we are hoping to solve this problem by championing our sustainable impact investment model.

We invest in old economy businesses within our target African countries. These businesses may not be the unicorns promising 100X in return, but they are stable, economically exciting and have immense scaling potential. These businesses form the backbone of most African economies and have the potential to employ many people in the local population. One of the key metrics that we are using to measure the success of our social impact is the increase in employment, since youth unemployment is one of the biggest challenges faced by African economies. One of Kolanut’s investments is within the transport industry in Ghana where we use a work-and-pay model, working with the local drivers to get returns while improving their quality of life by providing a source of income. In Kenya, we run a technologically-driven poultry farm where we engage with data to analyze market demand to get optimal numbers of broilers to raise in eight-week cycles throughout the year. The farm generates employment opportunities while also producing food for the local market.

We can’t wait to have a fun and productive summer in the Keller Center’s eLab Accelerator as we strive to fine-tune our impact investment model, KolaNut Investments.

We can’t wait to see you on Demo Day, Alexander!!  Be sure to attend one of our two Demo Days this August to see how Alexander and his team have grown KolaNut Investments this summer.