Zoscales Partners: Invest Where It matters

Impact is embedded in the DNA of Zoscales Partners. Since its founding in 2014, the private equity firm has not only delivered competitive financial returns but has generated measurable impact and contributed to sustainable economic growth and quality job creation in East Africa – a region characterised by many high-growth, high-impact investment opportunities.

The positive impacts brought by Zoscales Partners’ investments in East Africa are easy to spot. The firm has channelled $75m to the region and created more than 800 quality jobs in Ethiopia and Kenya via its portfolio investments in local small and medium-sized companies.

“In East Africa, it is easy to deliver impact without compromising financial goals. Our focus area is small- and medium-sized enterprises, as they are the catalysts of local economies and generate 7 out of 10 formal jobs in emerging markets,” says Co-Founder and Managing Partner of Zoscales Partners Ashenafi Alemu and adds:

“Many SMEs in East Africa have tremendous potential but limited availability of capital. By availing equity capital to local SMEs, we have the opportunity to generate outsized impacts, both financially and non-financially.”

SDGs are Part of Investment Strategy

Zoscales Partners operates from its local offices in Addis Ababa and Nairobi with an on-the-ground focus and a strong emphasis on hands-on investing. They have a proven track record of taking active ownership of their portfolio companies and implementing strict Environmental, Social and Governance (ESG) criteria. In 2019, Zoscales also started working under the umbrella of the United Nations Sustainable Development Goals (SDGs) and has delivered measurable results linked to SDGs 3, 4, 5, 6, 8, 11 and 13. Notably, Zoscales also improved its commitment to gender equity, and the female employee proportion of Zoscales’ portfolio rose from 37% in 2019 to 58% today – in fact, Zoscales’ entire portfolio meets the Gender 2X criteria.

“Our investment thesis is founded on strong financial principles, and we believe that our close adherence to best practices in ESG and impact is a key driver of long-term performance and a way of controlling risks,” says Co-Founder and Managing Partner of Zoscales Partners Jacop B. Rentschler.

In 2021 alone, Zoscales Partners created 337 new quality jobs in Ethiopia and Kenya, ensuring that all workers benefit from health and accident insurance cover and are given access to labour unions. Consequently, all portfolio company employees earn above their respective industries’ minimum wage. Zoscales has a stated goal to create an additional 300 jobs by the end of 2022, bringing the total number above 1,100 since 2017.

Zoscales Partners Investing in East Africa’s Underserved Healthcare Sector

Huge strives were made in Ethiopia in recent years in terms of access to quality healthcare services in East Africa, another core focus area for Zoscales Partners. The fund invested in Pioneer Diagnostic Center (PDC) in 2020 and has brought cutting-edge diagnostics to Ethiopia. Zoscales’ investment has helped PDC upgrade its existing facilities and double its CT scan capacity to serve an additional 10,432 patients per year.

Moreover, Zoscales Partners has invested in a secondary private hospital in Kenya, Premier Hospital located in Mombasa, with a plan to build a premium multispecialty hospital network that is well-positioned to service the growing middle-income population across the region. This is expected to catalyse the provision of affordable, high-quality healthcare in East Africa.

The Next Fund is Open for Investments

Witnessing also an increasing investor demand for sustainable investments, Zoscales Partners will continue its impact journey as it is raising its second fund, with a $200m target size and continued focus on SMEs within core industries. The strategy is widely unchanged – concentrating on quality deals in industries with high growth and impact potential – but with an aim to expand into more markets in the region.

“Zoscales Partners is entering an exciting new chapter, and we are highly motivated to continue our efforts to invest in the improvement of life and environment for the people of East Africa,” says Managing Partner Jacop B. Rentschler.

“We ensure that profit-seeking never comes at the expense of positive outcomes for society,” concludes Jacop B. Rentschler.

About Zoscales Partners

Witnessing the high growth potential of local small and medium-sized enterprises across East Africa, Managing Partners Ashenafi Alemu and Jacop B. Rentschler founded Zoscales Partners in 2014 to give international investors access to the rapidly growing East African markets that offer a wide range of investment opportunities. With local offices in Ethiopia and Kenya, Zoscales combines its international investment experience with its deep local knowledge and extensive network to deliver sustainable and long-term returns with positive impacts on society. Due to their growth potential and promising exit paths, Zoscales focuses on the consumer goods, healthcare and materials sectors.

Zoscales has undertaken six investments across Ethiopia and Kenya via Zoscales Fund I, a $75m fund launched in 2017 and backed by a mix of commercial investors and development financial institutions. Fundraising is now underway for Zoscales Fund II.