Investor Updates: Pan-African CAIF fund closes at $112.8m

Pan-African CAIF fund closes at $112.8m

Highlights

• Tunisia-based investment platform AfricInvest and US-based VC firm Cathay Innovation have completed the final close of their joint pan-African venture fund, Cathay AfricInvest Innovation Fund [CAIF], at $112.8 million, backed by EIB, AfricaGrow, FMO, Bpifrance, Triodos Investment Management, Proparco, SIFEM, BIO, as well as a diverse pool of global investors.
• The CAIF fund will invest in early to growth-stage startups improving African lives with disruptive tech-enabled products and services.
• The selected startups will receive investments ranging from $1-10 million for growth-stage and up to $1 million for seed-stage tickets in startups focusing on fintech, mobility, healthtech, edtech, AI, digital content and agritech.

Source: TechCrunch

Our Takeaway

The venture capital market in Africa has seen exponential growth over the last decade with the acceleration in digital transformation across all sectors. As a result, the industry is becoming the fastest-growing innovation ecosystem globally. In 2021, the ecosystem reached a new milestone of over $5 billion in venture capital, more than the preceding two years combined and close to three times more than in 2020. And despite the global VC funding slowdown this year, Africa is on track to break last year’s record, having raised over $3 billion in the first six months of the year. 

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MTN Group in talks to buy South African rival Telkom

Highlights

• South African mobile group MTN is in talks to buy smaller rival Telkom in a stock or cash-and-shares deal that would leapfrog market leader Vodacom Group.
• The potential $1 billion-plus deal would give MTN access to Telkom’s fiber assets, seen as a must for expanding 4G and 5G mobile services.
• But some analysts questioned if South Africa’s competition regulator would approve a tie-up that would effectively create a telecoms duopoly in Africa’s most advanced economy.

Source: Reuters

Our Takeaway

In 2020, MTN announced its exit from the Middle East to focus on the African market. Expanding its network capabilities through massive investments in key markets like South Africa and Nigeria is central to this strategy and if its proposed acquisition of Telkom is successful, the Group would get access to Telkom’s Openserve fiber business, which made $782 million in revenues in the last financial year and connects around 2.5 million premises. For end users, however, such a deal would reduce competition and could lead to higher data prices, experts warn, at a time when South Africa’s data costs are already high compared with other developed telecom markets.

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Mauritius IT provider inq. acquires Swedish firm Enea AB

Highlights

• Mauritius-headquartered Inq, a provider of cloud and networking services for edge AI and IoT, has announced an agreement with Sweden-based Enea AB to license the company’s edge intellectual property (IP) Enea Edge through a perpetual development license.
• For inq., access to Enea Edge’s software development kit (SDK) and IP will position it as an edge technology company with full stack ownership of edge computing technologies from devices to hypervisors and applications.
• The Enea Edge IP licensing is in line with the pan-African company’s goal of becoming a global edge computing leader, as it will allow it to enter the edge orchestration space and also be able to serve clients not only across Africa but in the US and Europe.

Source: TechCabal

Our Takeaway

Over the past few years, Africa has seen a flurry of activities in the IT and cloud computing space, from the launch of new or expansion of data centers (in Nigeria, Kenya, South Africa, Zambia, Côte d’Ivoire, Senegal, Rwanda, etc.) to millions (in USD) of foreign investments pouring into private operators on the continent. The acquisition of Sweden’s Enea by inq. is just another sample. This trend is expected to continue as Africa’s technology ecosystem grows, particularly with the increasing number of internet users and demand for enterprise IT services.