Investors update: July 4 2023 - DRC-based Nuru gets $40m to build solar mini-grids

DRC-based Nuru gets $40m to build solar mini-grids

Highlights

• Nuru, an energy startup in the Democratic Republic of Congo, has raised $40 million in a Series B round led by the IFC, GEAPP, and other VC, impact, and family office funds.
• While the IFC’s equity investment also includes financing from the Finland-IFC Blended Finance for Climate Program, the startup hopes to close off an additional $28 million in project finance by the end of July.
• The fund will be used to build three mini-grids in DRC—Goma, Kindu, and the largest in Bunia. With a combination of solar power and batteries, the total generation capacity will be 13.7 megawatts.

Source: TechCabal

Our Takeaway

The DRC is one of the largest countries in Africa, by both land area and population. It’s also one of the least electrified—per the World Bank, only 19% of its 108 million people have access to electricity. The decreasing costs of solar systems, relative to either grid or diesel generators, provide a real chance at closing the energy access deficit while aiding the diversification and decentralization of DRC’s energy mix. We’re already seeing innovative solutions in this area driven by startups like Nuru, which aims to connect more than 120,000 people in the next phase of its project.

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Nigerian equities are at their highest level in 15 years

Highlights

• Equity trading on the Nigerian Exchange Limited (NGX) concluded the first half of the year on a positive note, with the All-Share Index gaining 18.9% and closing at 60,968.27 points.
• That marked a significant milestone for the index, which reached its highest level in 15 years since March 2008, when it stood at 66,381.20.
• The market rose by 9.32% in June, breaking a four-year streak of losses for stocks during the month. That was also the best monthly performance for the stock market in approximately two and a half years.

Source: African Markets

Our Takeaway

Despite concerns such as rising inflation, interest rate hikes, and apprehension surrounding the fallout of the 2023 general elections, investor confidence remained strong, leading to increased buying activity. The positive sentiment among investors can be attributed to several factors, including the peaceful transition to power following the 2023 elections, favorable policies introduced by President Bola Tinubu’s new administration such as the removal of fuel subsidies, streamlining of exchange rates, and the floating of the naira.

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African tech VC funding was down 52% in the first half of 2023

Highlights

• African tech startups raised $1.19 billion in the first half of 2023, down by more than half compared to the same period last year, as investments in the sector continue to feel the effects of a depressed global economic climate.
• Per Disrupt Africa’s African funding report, 633 African tech startups raised over $3 billion in 2022, representing incredible growth.
• This year has been a regressive one, however, in line with global trends in investment – what is becoming known as the “reset” after tremendous growth that went before.

Source: Disrupt Africa

Our Takeaway

Africa was a hotbed for venture capital investment last year. While the global venture capital market took a hit, the continent bucked the trend as the only one to record year-on-year growth. But the VC winter appears to have caught up with the continent, which will expect will force startup founders unable to raise capital to either sell to bigger players or go under. Already, acquisitions have been on the rise in Africa lately. Intra-country acquisitions grew 31% in Q2 to 52% in Q3 2022, per TechCabal, signaling an increasing consolidation trend boosted by falling prices and a venture capital crunch.