African private equity and venture capital deal-making in April were dominated by investments in technology companies, particularly fintech and business-to-business platforms, together with encouraging activity in the agribusiness & food sector. This according to data provided by Africa Private Equity News, an industry information service.
Fintech investments were mostly in mobile-enabled banking and financial services companies. These include: French development-finance institution Proparco’s $3-million backing of JUMO, which helps customers to access loans and savings products in East and West Africa; and a $70-million round, led by US-based Trinity Ventures, into credit provider Branch International. Digital payments network MFS Africa also raised $4.5 million in funding, led by LUN Partners Group, thereby becoming one of the first fintech players on the continent to receive funding from a China-based venture capital firm.
Business-to-business solutions remains an attractive theme, with TLcom Capital announcing two investments in the space – a $5-million injection in Nigeria-based mobile marketing company Terragon, and a $3.5-million Series-A round for Kenyan consumer-feedback platform mSurvey, which plans to use the capital to scale and expand into more countries. Asoko Insight, a provider of data on African companies, attracted $3.6 million in additional funding from its early shareholders and some new ones, while South Africa-based Giraffe – which enables businesses to recruit high volumes of medium-skilled staff – closed a second round of investment, supported by FirstRand’s Vumela Fund, with participation from Omidyar Network, the Brozin family’s Forever Young Capital and Catapult Trust.
The continent’s rapidly-growing food market could be worth more than $1 trillion annually by 2030 as imports are substituted with high-value locally-produced food, according to the Alliance for a Green Revolution in Africa. With 60% of the world’s unused arable land, Africa’s potential in the broader agribusiness sector is also enormous.
The sector continues to attract interest from private equity firms such as DOB Equity, which last month backed Rwanda-based grain trader Sarura Commodities. Furthermore, Agri-Vie and Norfund announced a $7 million co-investment in Marginpar Flower Group Holdings, which has floriculture interests in Kenya and Ethiopia. In addition, South African-based The Beverage Company, in which Ethos Private Equity and Nedbank Private Equity owns a stake, signed an agreement to acquire 100% of SoftBev, the sole licensed bottler for Pepsi and its related brands in South Africa, from Bowler Metcalf and the original founders.
“In South Africa specifically we’re seeing agro-processing and food production becoming quite topical. If you pick the right investments here you can generate superior returns,” commented Tshego Sefolo, CEO of Agile Capital.
When it comes to private equity exits, glass packaging manufacturer Consol, which counts the Brait Fund IV as a significant shareholder, in early April announced its intention to list on the Johannesburg Stock Exchange (JSE), only to later withdraw its IPO plans, citing unfavourable market conditions. However, private equity firm Abraaj might soon realise its investment in South Africa’s Libstar Holdings after the food and personal care manufacturer said it would list on the JSE in May. Also on the exit front, Helios-backed Vivo Energy, a retailer and marketer of Shell-branded fuels and lubricants in Africa, announced that it too plans to float on the London Stock Exchange and the JSE.