Last week in brief...Technology investments featured largely in last week's private capital markets activity in Africa. The biggest of them all, or potentially the biggest, came courtesy of Actis which made its first deal for a new data center platform company which the private equity firm plans to build. The foundation of this planned, $250 million platform is Rack Centre, Nigeria's largest data center business, which Actis invested in last week. What Actis is paying for its controlling stake is not being disclosed.
The Fintech sector on the continent was the focus of several investors. The most significant, in our view, was the news that Quona Capital's second fund was oversubscribed by 25%. Between them, the global asset managers, insurance companies, investment and commercial banks, university endowments, foundations, family offices, and development finance institutions have invested a total of $203 million in the Accion Quona Inclusion Fund, outstripping the fund manager’s initial goal of $150 million.
The new fund's strategy is to target equity or equity-equivalent investments in early- and growth-stage companies that develop or provide products, services or technology to expand financial inclusion in emerging markets. To date, the fund has made nine investments across a number of emerging markets, two of which are in Africa. In July last year, the fund invested in Cape Town-based digital lender Lulalend’s $6.5 million Series A and just two weeks ago, led a group of investors backing a $14 million Series A round for Sokowatch, an e-commerce startup based in Kenya.
Partech Africa and Prime Ventures have completed a deal to acquire TerraPay in partnership with the firm’s management and invest additional growth capital into the business alongside the IFC. The amount being paid to acquire the business is not being disclosed, but the growth capital injection, which totals $9.6 million, will be used to fund the startup’s continued growth. TerraPay provides B2B transaction processing, clearing and settlement services for mobile wallets using its technology to act as the interoperability engine that enables its partners’ customers to send and receive real-time transactions across diverse payment instruments, platforms, and regions.
In the commercial and industrial off-grid power space, ARCH Emerging Markets Partners has struck a $16.5 million equity deal with CrossBoundary Energyvia the ARCH Africa Renewable Power Fund, a dedicated fund set up to back opportunities in the bankable, de-risked renewable electricity generation projects. A company representative declined to disclose the structure of the investment but indicated that of the total amount being committed, $13.5 million has been earmarked to finance projects entering construction with the balance to be used to fund project development activities.
At the other end of the power spectrum, the IFC has led a group of fellow development finance institutions in a debt deal for a new gas-fired power project in Cote d'Ivoire. Between them, the investors are providing €303 million to the Akintou, the name of the planned power plant, which, once complete will boost power generation and supply in the West African country. The project consists of a 20-tear concession to develop and operate a 390MW natural gas-fired power plant located some 40 kilometers west of the country's capital city, Abidjan.
The IFC was involved in another item we reported on last week. The DFI's board is set to review a significant potential anchor investment in a new investment platform being set up by South Africa-based ASOCapital, a specialist investor in distressed SMEs. The investment, should it go ahead, would see the institution invest up to a total of $50 million in the investment vehicle, made up of a $30 million senior loan and a $20 million limited partnership interest. ASOCapital will likely hear their decision when they review the potential investment in early April.
Staying in South Africa, Snapplify, an edtech business backed by Knife Capital and Hlayisani Growth Fund late last year, has acquired an educator media hub and teacher resource marketplace. The acquisition of Onni Media, owner and developer of several digital platforms including Teacha!, further diversifies Snapplify’s educational portfolio, boosting its position as a leading business in the global e-learning market.
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 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 markets. Mr. Cunningham holds a Bachelors degree from Liverpool John Moores University in the UK.
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