GreenTec is Reading: Disrupt Africa’s “Why African Start-ups are on the acquisition trail”

A display picture of two h

Frankfurt (Germany), June 2018. This week, we are happy to share an interesting article from Disrupt Africa “Why African Start-ups are on the acquisition trail” by Tom Jackson.

The article presents an interesting corollary to the Disrupt Africa African Tech Startups Funding Report 2017 (NB: the report is available for purchase from Disrupt Africa’s website). The report also tracks acquisitions and exits by African start-ups.

While there were only five African start-ups acquired in 2017, down from a total of nine in 2016, there are other signs of the African start-up segment maturing. First, there is clearly interest and appetite for the sector, with African start-ups, notably the fintech sector, raising record levels of investments in 2017. This appetite is also reflected in the growing number of African start-up funds, including Partech Africa, the TIDE Africa Fund, IPAE 2, the Goodwell Africa Fund, and the French Government’s 72 million African fund. Second, and arguably more indicative of the sector’s progress is that African start-ups were doing the acquiring.

In February, Kenya’s BitPesa, which raised two funding rounds last year to take its total secured investment to around the US$10 million mark, bought Spain-based online money transfer platform TransferZero. Ghanaian marketing startup Kudobuzz has made two acquisitions this year, buying e-commerce product RetailTower and advert creation tool AdGeek. This was a process begun by Nigerian on-demand delivery startup Metro Africa Express (MAX) late in 2016 when it acquired Lagos-based Easyappetite. What is significant, beyond that a European start-up was acquired by an African one, is that these acquisitions represent a beginning of a consolidation period. A strong period of growth and expansion in the start-up sector has lead to inefficient overlaps and consolidation is necessary. With the infusion of VC funds entering the African start-up space, we expect these mergers and acquisitions to increase in frequency as complementary businesses begin to align and value-creating synergies are identified. GreenTec’s own investment strategy includes a close focus on synergies in anticipation of the growth of the sector. We expect to see the fruits of African innovation to continue to mature and develop and an increasing number of exits and participating players will attract further investments.

 

Links

Other Posts

Amitruck raises $4 million for scaling into Uganda and Tanzania

Frankfurt (Germany) and Nairobi (Kenya), February 2022. GreenTec Capital is very pleased to report that Amitruck, our Kenya-based logistics-tech portfolio company, has closed a US$4 million seed round. Amitruck will use the funds to bolster its operations, technical, and sales teams supporting its expansion in East Africa. The funding round was led by Better Tomorrow…

read more

Angel Investing in Africa – Never a better time to Learn

Register for the Axum Masterclass on Angel Investing on February 16th, 15:30 CET Frankfurt (Germany), January 2022. To look for signs that the African VC segment is maturing, one need only to look at the staggering $4.3-$4.6+ billion in reported deals closed in 2021. While lower than other international start-up markets, this represents a 150%…

read more

Amitruck partners with IMFact to access greater financial capital for East African scaling

Frankfurt (Germany) & Nairobi (Kenya), October, 2021. GreenTec Capital is pleased to share that its portfolio company, Amitruck, has partnered with IMFact,  a pan-African FinTech offering alternative financing options to SMEs in the supply chain industry. IMFact is a Smart Finance alternative to traditional bank lending for Kenyan SMEs operating in the supply chain business…

read more