The week in brief…February 16th, 2015
It was a relatively quiet week on the deal front last week in Africa’s private capital markets. Perhaps that was due to the fact that there were a couple of major distractions for investors last week, namely two important conferences in Cape Town. Firstly, there was that annual fixture, the Investing in Africa Mining Indaba which reportedly had some 7,000 delegates in attendance. It’s likely that private capital investors were well-represented in the crowd. With commodity prices hitting 10-year lows, valuations are very attractive to private equity investors who’ve been biding their time. Look to see them doing a number of deals in the sector in the coming year. The second distraction was happening in Stellenbosch; the South African Venture Capital Association’s annual get together which is a must attend for many in the private capital ecosystem.
Of the deals that were announced, all were in the consumer sector. Nedbank Capital took a 33% stake in GloCell, the $430 million South African cellular telecoms company. The terms of the deal were not disclosed. Nedbank was attracted by GloCell’s market leadership position and its growth potential and the capital is expected to be used to help the company further expand its market reach.
In a first, Ascent Capital made a $2.5 million investment to take a 50% stake n Ethiopian medical diagnostics play Medpharm Holdings. This is the debut investment being made from Ascent’s Africa Rift Valley Fund. The funds will be used to build a state-of-the-art pathology lab, broaden the range of diagnostic tests available and expand its services to the broader East African region. Meanwhile, Kenyan remittance payments startup landed a $1.1 million second round from a group of investors led by San Francisco-based Pantera Capital. As part of the deal, Pantera’s CEO Dan Morehead will take a seat on BitPesa’s board.
A number of interesting perspective pieces were published last week. The mounting concern around the foreign exchange risk the appreciating US dollar poses to Africa’s sovereign debt markets is examined by Amadou Sy of The Brookings Institution. He examines the Overseas Development Institute’s recent report and concludes that it is not time to worry…yet. In a separate piece, DPI’s Co-Founder Runa Alam tells Institutional Investor where the private equity opportunity in Africa stands today and which sectors hold strong appeal. And at the Mining Indaba, panelist Robert Hersov shared his view with the audience that a “tsunami” of US capital is building, soon to wash up on Africa’s shores.
You can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.