Africa Capital Digest - The Weekly Wrap, June 26th 2020

Last week in brief...A deal that South Africa's Competition Commission gave the go-ahead to earlier this year completed last week. Senatla Capital, a private equity firm based in Sandton, is investing in Joe Public United, one of the largest independent advertising and media agencies in South Africa. The investment, which is being transacted via two of Senatla's funds, SCEF II and SCEF III, gives the funds and Ikamva Lakusasaa, a black management investment vehicle co-funded by Senatla, a combined 60% stake in the 22-year old business. Joe Public's founders retain the balance of the company.

Zeder Investments has exited another investment, selling its minority stake in Quantum Foods to Country Bird, an unlisted producer of poultry and animal nutrition products, and boosting Zeder's cash pile existing and new investments. The specialist agribusiness investor ended up with its stake in Quantum Foods following its investment in Pioneer Foods in 2014 from which Quantum Foods was carved out, restructured, and repositioned. (Pioneer was sold to PepsiCo a couple of months ago in what is the global consumer giant's largest deal in Africa to date).

We reported on one portfolio company-sponsored acquisition last week. Helios Investment-backed TPAY Mobile has struck a deal to acquire Payguru, a Turkish payment services provider. In the words of TPAY's CEO, Sahar Salama, the deal "...extends our footprint in the region, continues our diversification into new business lines, and also significantly strengthens our value-added services proposition in the region." TPAY has ambitions to be the biggest digital payments platform in the Middle East and Africa.

Once again, venture deals proved to be buoyant last week. Chipper Cash, a fintech startup with services used by customers in seven countries in Africa has landed a healthy amount of capital for its Series A from a mix of new and existing investors. The round was led by first-time co-investors Deciens Capital and Raptor Group. A couple of Chipper Cash's seed round investors, 500 Startups and L2 Ventures, also took part.

Change Ventures is leading a seed round for Planet42, a startup that enables more people at the lower end of the economic scale in South Africa to rent and buy pre-owned cars. The round is providing the company with €2.2 million, raised from Change and a group of individual investors. The firm will be used to expand its portfolio of vehicles, supporting the company's already rapid growth. As well as having a significant addressable market in South Africa, other emerging markets offer the business major expansion potential which the startup will tackle by financing motorcycles and other types of mobility alongside cars.

Mobiz has raised an additional amount of capital from HAVAÍC for its pre-Series A round, adding to the $1 million it already had in had from Kalon Venture Partners. When Africa Capital Digest reported on the Kalon investment in April, it was expected that HAVAÍC would be investing an additional $1 million in the five-year-old business. The capital from the round is being earmarked for Mobiz’s hiring plans as well as for investments in planned marketing and software development initiatives.

In fundraising news, Finnfund has anchored Finland's first emerging markets impact fund which held its first close last week, raising a total of €76 million (approximately $85 million) from several Finnish institutions. Priority will be given to investing in opportunities that positively impact climate change, food security, gender equality, and the availability of financing. Among the fund's first investments under consideration is a deal with an innovative food production opportunity in East Africa.

Meta Change Capital, a specialist blockchain investor, has announced the launch of an emerging-markets focused fund which will raise €100 million or about $112 million to invest in blockchain startups. The fund is sector agnostic and its strategy will be to back blockchain entrepreneurs in different emerging markets regions in Series A and later rounds.

For the final piece of fundraising news, the European Investment Bank is considering an equity investment in a closed-end private equity fund which will back female entrepreneurs and investments in companies that address the needs of women in Africa. The development finance institution is mulling a $17 million investment in the fund, helping it on its way to its final close target of $170 million. The Women's Development Business Equity Fund will source opportunities among businesses in sub-Saharan Africa that meet the 2X challenge criteria.

Michelle Kathryn Essomé is stepping down as the CEO of the African Private Equity and Venture Capital Association (AVCA) after 9 years in the role. The announcement came in the form of a post on the industry's association's website last week. As one of the industry's key leaders focused on the continent in the past decade, she's directed the association through some uncertain periods including the capital flight following the 2008 financial crash, commodity prices crashes, and shaken investor confidence. As yet, no replacement has been named to the CEO role at AVCA.

Afreximbank's shareholders have voted to reappoint Benedict Oramah to a second 5-year term as the multilateral trade finance institution's President. The vote was held at Afreximbank's annual general meeting, which this year was conducted by the circulation of resolutions rather than in-person in response to the current COVID-19 pandemic. A Nigerian national, Oramah joined the pan-African institution in 2015. In accepting the reappointment, Oramah told shareholders that over the course of his second term, he'll be focused on the Bank's ultimate goal of creating an integrated market on the continent.

And finally, we ran a piece from Ocorian analyzing why the continent’s digital divide could continue to expand. While Africa has seen some of the world's fastest increase in e-connectivity in recent years, still only 25% of its population has access to the internet. John Félecité and Novan Maharahaje discuss the problem and highlight the role of private sector financing and corporate governance in helping to bridge the gap.

That's it for this week. As always, you can review these and other stories by clicking through to this week's preview edition of the newsletter.

Allan Cunningham

Allan Cunningham is a senior media executive who has spent the last 15 years of his career working for some of the world’s most respected M&A and Private Equity media companies including Dow Jones’s publications Private Equity Analyst and VentureWire and most recently, The Deal. He has built a number of successful digital and event content businesses, both subscription and sponsor-supported, delivering information and content-marketing services to clients in the M&A and broader deal ecosystem. He recently struck out on his own and launched Rowayton Press, a multi-platform media company focused on the private capital opportunities in emerging and frontier

• By Allan Cunningham
• 26/06/2020
• Private Equity in Africa