Last week in brief…November 21st, 2016
There were some interesting private equity and venture capital related-transactions in Africa last week. One huge, another featured a couple of pukkah Silicon Valley outfits while yet another involved an exit to a Swedish multinational.
The biggest deal of the week (and of the year) involved China and a mine. BHR Partners, a Chinese private equity firm agreed to buy Lundin Mining’s 24% stake in the Tenke Fungurume mine in the Democratic Republic of Congo for at least $1.136 billion. Lundin Mining held the indirect minority interest in the mine through TF Holdings, a Bermuda holding company that owns an 80% interest in the mine. Lundin’s 30% stake in TF Holdings translates into a 24% interest in the giant copper and cobalt mine. The deal is expected to close in the first half of 2017.
In exit news, RMB Corvest has sold its stake in Kwikot Group to Swedish multinational Electrolux in a deal that values the South African water heater producer at R3.18 billion, or almost $220 million. The private equity investor originally backed Kwikot in 1999 as part of a leveraged buyout from the Boumat Group and has spent the last 17 years helping management expand products and sales. They profess themselves very happy with the result.
A couple of blue chip Silicon Valley venture firms have participated in a Series B round for a Drone company that’s launched a medical drone delivery service in Rwanda. Sequoia Capital and Andreessen Horowitz are backing Zipline in a $25 million round led by Visionnaire Ventures. The new funds will be used to help Zipline expand its drone delivery services across Africa as well as enter other global markets. This latest round brings the total amount of capital raised by Zipline to $43 million and the company has already attracted investments from a group of notable investors in prior rounds including Google Ventures, Microsoft Co-Founder Paul Allen and Yahoo founder Jerry Yang.
There were a couple of pieces of news relating to smaller, DFI-related deals last week. In the first, the IFC is mulling a potential $16 million equity investment for a 10% stake in AXA Egypt Investments, a holding company for two companies offering life and non-life insurance products to the Egyptian market. AXA plans to distribute life, non-life and health insurance products via a network of branches, brokers, its internal direct sales team and commercial bank distributors. And int the second, UNICAF, an Africa-focused provider of University-level programs, is receiving an $11.5 million equity investment from CDC.The capital will be used to support UNICAF’s plans to establish higher education learning centers in several African cities, including the completion of a University campus in Malawi.
At the smaller end of the deal spectrum, Clifftop Colony Capital Partners has led a consortium of South African and international angel investors backing iono.fm with R2.5 million (approximately $175,000) of seed capital. The deal marks the first infusion of equity in the online audio platform which has been self-funded since its founding in 2008. The fresh capital will be used to consolidate iono.fm’s domestic operations as well as invest in the development of the company’s streaming and podcasting services. And Cactus Capital announced that it has completed undisclosed investments in two African fintech startups – Flutterwave and E-Factor. The deals raise the total number of companies in its portfolio to three, following an investment in Ugandan mobile payment aggregator Intel World International in the first quarter of the year.
In fundraising news, the World Bank is joining forces with Moroccan Sovereign Wealth Fund Ithmar Capital to launch the Green Growth Infrastructure Facility for Africa. GGIF Africa, which will be structured as a private capital fund, will look for commitments from a range of private investors interested in Africa who are looking for responsible and green investment opportunities. As yet, no details of the size of the fund have been reported.
Meanwhile, TLcom’s TIDE Africa Fund has garnered a $10 million commitment for the African Development Bank following approval last week from the institution’s board of directors. The news helps the fund take another step towards its $100 million target. The 10-year fund, which is aiming to provide its investors with a net IRR of 16%, will target businesses that leverage technology to lower the cost of services to enterprises and consumers alike on the continent. According to the press release announcing the capital commitment, the fund has a deal pipeline of more than six hundred companies, six of which are investment-ready for the first year of the investment period.
Finally, Xolani Nyali of Bowmans penned a piece prompted by the East African Community Competition Authority announcement of the swearing in of five new commissioners last week. The appointments mean that compliance with the regulations of this new competition authority will most likely be needed from early next year.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.