Investors update: January 30 2023 - Convergence Partners raises $296m Africa tech fund

Convergence Partners raises $296m Africa tech fund

Highlights

• Buyout firm Convergence Partners has raised $296 million to buy African technology assets, Chairman Andile Ngcaba was quoted as saying by Bloomberg.
• The capital raise, one of the first private equity funds secured for sub-Saharan Africa this year, will bring the total funds under management at Convergence to about $600 million. 
• The new money, which surpassed the firm’s initial target by over 18%, is mainly from previous investors, development agencies, and pension funds in the US, UK, Europe, and Africa.

Source: Bloomberg

Our Takeaway

Internet broadband penetration in sub-Saharan Africa has grown exponentially over the past two decades, mainly as a result of investments in enabling infrastructure. Still, there is more work to be done to close an existing digital divide on the continent—only 28% of the sub-Saharan African population was connected to the internet as of 2020—and ensure that Africa is able to reap the benefits from the current and subsequent iteration of the technologies. 

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Yebo Fresh raises $4.5m to deliver fresh food in SA

Highlights

• South African e-commerce startup Yebo Fresh has secured a ~$4.5 million pre-Series A equity investment and a Jobs Fund grant to expand further, build on its physical and systems infrastructure, and attract new talent.
• Yebo Fresh makes it easy for independent businesses to purchase groceries and other essential items. Orders are placed via WhatsApp or through a team of field sales agents. 
• A dark store-based fulfillment model delivers orders within 24 hours, eliminating the cost and hassle of shopping trips to wholesalers while offering a buy-now-pay-later option.

Source: TechCabal

Our Takeaway

While the South African upper market is well-served by quick commerce delivery services such as Checkers Sixty60 and PicknPay ASAP, Yebo Fresh claims to be the only player exclusively focused on the township market. The startup now delivers to more than 25 townships in the greater Cape Town and Johannesburg areas, working with a rapidly growing network of spaza shops, prepared food outlets, and other township businesses.

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SA private equity firm partners with Irish-based fund

Highlights

• South African private equity firm Innov8 Group Holdings, which provides funding for medical technologies to the African medical industry, has partnered with an Ireland-based fund and family office.
• The deal values the company at about $14.5 million, with initial seed investors seeing a 60% return on a partial exit, as well as significant capital appreciation.
• Innov8 Group Holdings’s portfolio companies include MyPocketHealth, Innohealth Clinics, AI Biologics Africa, and Social Medical.

Source: TechCabal

Our Takeaway

Africa’s healthcare technology and biotechnology industry is a vast and untapped market, with a rapidly growing population and increasing demand for access to quality healthcare. The continent’s population is projected to reach 1.7 billion by 2050, and current infrastructure challenges affect the ability to meet an equally growing demand for healthcare services. This presents a significant investment opportunity in this space, as new and innovative solutions are needed to address the continent’s healthcare challenges.