Mergers, Acquisitions and IPOs would follow African ScaleUPs

I conclued my last oped on the prognosis that exits would follow African scaleups and by that I meant some of the deals would be mergers, others would be acquisitions, whilst a third category may go public. The drafting and publication of this paper was delayed by the massive internet outage in West Africa¹, caused by the severance and disruption of four subsea cables. The incident drew my attention to the need for a resilient internet infrastructure in Africa , a subject on which I am currently writing a paper to compliment this interview I granted as part of a panel discussion on Africa’s internet resources. Without a resilient internet infrastructure, we risk a faulty foundation on which we build startups, scaleups, mergers, acquisiton and initial public offerings (IPOs)

Source: Transaction Capital.

Nigeria’s leading payment company, Flutterwave has announced going public next year on the NASDAQ⁹ and so has Airtel Mobile Money without disclosing details¹⁰These would herald a return to the international public markets for African tech ventures which would bring back the much needed investor attention. This would create a counter current to the funding winter for the flow of investment into the risky venture capital asset class. The compounded imapct of African tech ventures going public on both the local and international markets would have a cascading effect that would drive more early stage investments in the angel investment market. The private equity market would eventually feel the ripples – making for liquidity all around.

Flutterwave has scaled into multiple African markets haven raised $509M and is valued at $3B from it’s last $250M raise from the likes of Avenir, Visa Ventures and Mastercard. It powers one million businesses across the continet and has processed over 400M transactions worth $25B for clients like Uber, Wise and Microsoft. Four other African scaleups that could go public, get merged or acquired are Onafriq from South Africa, Cellulant from Kenya, Hubtel from Ghana and Djamo from Ivory Coast – these are from the KINGS countries of Kenya, Ivory Coast, Nigeria, Ghana and South Africa and are all fintechs.

Flutterwave, Onafriq and Cellulant are head on in the same category of payment infrastructure with frontprints in multiple countries and they are followed by Hubtel and Djamo who are also in the same category but are considered embedded fintechs because their payment infrastructure is not obvious. They are both scaling up now with Djamo going into Senegal whiles Hubtel going into Kenya, Nigeria and Cameroon soon. These are just a sample of the leading African tech ventures that are scaling up to merge, get acquired or go public – setting the tone for what is yet to come.

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