Investors update: January 11 2023 - BioNTech acquires InstaDeep for $680m

BioNTech acquires Tunisia’s InstaDeep for $680m

Highlights

• BioNTech SE is set to acquire InstaDeep, a Tunis-born and U.K.-based artificial intelligence (AI) startup, for up to £562 million (~$680 million).
• The company will reportedly pay £362 million — a mix of cash and an undisclosed amount of BioNTech shares — upfront. The remaining £200 million is dependent on how InstaDeep performs in the future.
• The German vaccine maker intends to use InstaDeep’s machine learning to improve its drug discovery process, including developing personalized treatments tailored to a patient’s cancer.

Source: Financial Times

Our Takeaway

The InstaDeep deal is BioNTech’s biggest acquisition to date and also the largest M&A deal involving an African-founded startup, with reports suggesting the Tunisian co-founder Karim Beguir—who reportedly owns 19.6% of the company—is in line to potentially make more than £100 million from the sale. AI-focused tech startups are springing up across Africa and increasingly attracting VC dollars to serve several industries, including financial services, logistics, and consumer goods (FMCGs). Besides InstaDeep’s $100 million raise one year ago, Egypt-based Instabug and Synapse Analytics raised $46 million and $2 million respectively.

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African economy to fare better than peers in 2023

Highlights

• The World Bank has lowered its growth forecast for the global economy this year as persistently high inflation has elevated the risk for a worldwide recession.
• The bank expects global growth to slow to 1.7% in 2023, down from an estimate of 3% growth in June. 
• If that forecast proves accurate, it would be the third-weakest annual expansion in three decades, behind only the deep recessions that resulted from the 2008 global financial crisis and the coronavirus pandemic in 2020.

Source: World Bank

Our Takeaway

While this is going to be a tough year for most of the world economy, the bank expects developing countries to fare better, growing 3.4% this year, the same as in 2022. Sub-Saharan Africa, particularly, is forecast to grow at a faster pace, 3.6% in 2023 and 3.9% next year. Other economists have also issued bleak outlooks, though most of them are not quite as dire. JPMorgan analysts predict slow growth this year but don’t expect a global recession.

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Nigerian regulators collaborate on crypto framework

Highlights

• Nigeria’s central bank is open to creating a regulatory framework for potential implementations of stablecoins, according to a recently released document cited by local media. 
• The regulation of initial coin offerings (ICOs) and how they can develop into a new approach to attract foreign direct investment (FDI) and raise capital” were covered in the report.
• The central bank also plans to engage relevant stakeholders to review and implement remittance solutions using blockchain technology.

Source: Nairametrics

Our Takeaway

Despite the hostile reception African governments have historically given cryptocurrencies, ordinary citizens on the continent continue to interact with crypto in very different ways. In fact, Africa accounts for some of the most important use cases and opportunities for digital currencies. African governments are now warming up to cryptocurrencies, with a recent flurry of regulatory moves suggesting apex banks on the continent are moving towards mainstream adoption of cryptocurrencies.