Acumen

Acumen is committed to catalyzing long-term impact for the poor. Our patient capital invests where commercial investors are unwilling to – in companies working on hard-to-solve problems in hard-to-reach areas; through those investments, we reimagine employment opportunities for women and youth. With a 21-year track record of investing to drive social outcomes for low-income and marginalised communities, Acumen is well-positioned to invest in the creation of dignified, decent jobs for African youth.

Investing in Harder-To-Reach Areas

In many countries throughout Africa, the number of people living in poverty has increased, with the rising unemployment rates undermining poverty reduction efforts. The lack of job opportunities is not only at the core of high poverty levels and growing inequality but also social unrest across the regions of East and West Africa.

As the impact investing sector evolved, capital has mostly been allocated to a narrow subset of social problems. For example, in 2021, 41% of impact assets in emerging markets were allocated to financial services, and over half of all venture capital funding in Africa was allocated to FinTech. These statistics indicate two problems: first, while financial inclusion is a significant problem, it is not the only problem low-income communities face. Second, as with many tech-based models, the job creation potential for these companies is often in the low 100s. Furthermore, the tech sector creates jobs that are concentrated in urban centers, while funding for brick-and-mortar companies in more remote regions remains scarce.

In this context, there is a unique role for Acumen to fill the gap and help create sustainable livelihoods for some of the most vulnerable populations across East and West Africa, particularly youth and women. We will achieve this by identifying impactful businesses that serve low-income communities and creating a roadmap for companies to reduce the barriers to employment for women and youth.

Planned Impact

Inclusive Work Initiative

Acumen’s approach to addressing youth employment in Africa is to invest equity and other innovative financing instruments into companies creating quality, sustaining jobs for low-income individuals, often in hard-to-reach areas. Leveraging its 21-year track record of patient capital investing and the expertise of local teams in East Africa and West Africa, Acumen is proposing to launch a €15M Inclusive Work Initiative (IWI). We will identify and invest in inclusive companies across Kenya, Ethiopia, Nigeria, and Uganda and make initial investments of USD 200-$500K. Through this Initiative, Acumen aims to create 5,400 jobs and improve 9,700 jobs between 2022-2025. We expect 40% of these jobs to be in green or digital sectors. 50% of our facilitated jobs will go to women and primarily serve rural communities.

Acumen will deploy new and follow-on investments and continue to provide post-investment support to companies to ensure sustainable growth and development.

The IWI will be driving job creation and improvement across four sectors: Energy, Agriculture, Education, and Work Platforms. Across all sectors, women experience shared barriers: they are often unable to move around freely in their communities due to their commitments within the home, are likely to have left school at an earlier age than their male counterparts, have smaller professional networks and less access to the internet, and lower access to finance for entrepreneurial ventures. Under IWI, Acumen will support companies adopting gender-sensitive business models and increasing the number of female employees.

Young people need fair opportunities to meaningfully participate in the labour market and thus in life. For this meaningful participation, private-public partnerships become essential. Still, private entities have an especially catalytic role in paving the way for a more inclusive and youth-centered work landscape.

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