Africa: Private equity and venture capital picked up again in 2021 with a 205% increase compared to 2020

The overall value of financing transactions outside banks and financial markets announced for the benefit of African companies reached at least $10.7 billion in 2021, found the Ecofin Agency from a series of data collected over the period. This figure may be higher, because of the 703 operations listed, the values ​​are available for only 445 of them.

These known figures represent an increase of 205% compared to those recorded in 2020 ($3.5 billion). It is also the highest level of funding announcements outside commercial banks and stock markets since 2018, when the record figure of $13.8 billion was reached. The number of operations (703) is also a record that had never been reached.

The operations that have characterized this alternative financing activity concern both private equity and the various stages of venture capital (series A, B, C, D, E), the amounts of which exceed $4 billion. We also find debt financing and financing before or after IPOs.

This upward trend in financing announcements for the benefit of African companies is an indicator of the return of investor confidence in Africa’s potential. It goes in the same direction as the increase in foreign direct investment announced by the continent, in the report published by the United Nations Conference on Trade and Development (UNCTAD).

We can also see that big deals sometimes conceal the fact that the volume of financing announced for the benefit of companies in the regions remains quite low, in comparison with other regions of the world. Thus, the top 10 announced transactions have a value of $5.5 billion, or more than half of the total.