Kolanut Capital: The Bridge to Investment in Africa

Wednesday, Sep 11, 2019
by Megan Donahey '20

According to the International Monetary Fund’s World Economic Outlook report for this year, Africa has four of the top five countries with the fastest projected GDP growth. By 2050, Africa's population is expected to double, and in less than 6 years, Africans will likely spend $5.6 trillion. Yet, foreign investors are often reluctant to pursue African market investments due to a lack of expertise in the local culture and economy. Two Princeton graduates, Alexander Asante '19 and Hannington Omwanza '19, combined their familiarity with the region and Africa’s investment potential to found Kolanut Capital, an operational private equity fund. Their mission is to achieve sustainable economic, environmental, and social progress in Africa, while benefiting both investors and employees through profitable, sustainable business.

Asante and Omwanza were born and raised in Ghana and Kenya before coming to the United States to study at Princeton. They each started small businesses in their respective countries, and after seeing the positive impact their companies had made, they decided to start Kolanut.

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Kolanut utilizes a three-year investment cycle where it provides its employees with the professional and entrepreneurial training to become business owners. With a larger pool of capital, they plan to solidify sustainable training methods while spreading capital across multiple small and medium sized businesses to mitigate risk.

“We are trying to find different ways to be able to connect foreign capital with local thriving industries,” said Asante. “Because we do have the local expertise and connections there, we are able to mitigate the trust issues that most people face in investing there.”

Asante and Omwanza believe that one of the biggest challenges facing African countries is the number of residents who are dependent on government jobs. Kolanut aims to combat this phenomenon by providing small and medium sized businesses the training and resources to succeed in the private sector. At the same time, the growth potential of African businesses should produce a generous return for Kolanut investors.

To build initial trust with investors, the team launched two pilot projects. Asante noticed the scarcity of transportation systems and the profitability of owning a vehicle. He decided to purchase a car, and in the first year received a large increase on his initial purchase. Omwanza took the lead on the second pilot project, launching a poultry farm. He provided local workers the necessary training to maintain the farm. Their current focus is to augment their contribution to the transportation and agriculture industries.

“We realized that the tiny amount of money we made for pilot projects was good enough to make a difference in someone's life,” said Omwanza. “With a larger pool of capital, you could stimulate [the economy] and make a bigger change.”

As they gain traction, Asante and Omwanza hope to expand beyond their initial industries and regions. As exemplified in their work so far, their ultimate goal is to make sustainable entrepreneurship the norm in the business practices of their host countries. This summer, they made significant progress at the Keller Center’s eLab Summer Accelerator, an intensive 10-week program that provides tools and resources to Princeton startups.  

“The eLab accelerator provided us with the office space, funding and advisors to make Kolanut Capital more than just an idea,” commented Asante and Omwanza. “We were able to finalize the legal structure of the company, put together a comprehensive business plan and develop our brand identity while also solidifying our local connections. We are currently working with our attorney and investors to close our seed round to begin operations in October.”

"Alexander worked with another Princeton student-founded startup BoxPower as part of the 2017 eLab cohort, so I was thrilled to see him apply again with his own venture, Kolanut," said eLab Program Manager Stephanie Landers. "Given Alexander’s prior involvement with the program, he and his team were quick to take full advantage of all the startup resources that Keller Center provides through eLab. Their tireless efforts and long hours spent in the Hub over the summer paid off as Alexander and Hannington, along with teammates Chege Gitau '19, Kevin Parker '20, and Jinn Park '21, met the goals they’d set out to accomplish at the start of the program. I’m so proud of their hard work and look forward to following along with Kolanut’s progress during the coming year."

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