Private equity activity in the region bounced back in 2018 after a tough 2017, with the disclosed value for deals recorded almost doubling to $834.3 million, compared with $446.78 million last year.
The increased deal activity is indicative of East Africa’s growing prominence as a private capital destination, in part driven by the stability of the region’s economies.
There were 47 PE deals announced this year, up from 27 in the previous year.
Kenya still led the region, recording 24 transactions, compared with 18 in 2017.
“Most investments had been in the pipeline during the election cycle waiting for the political tension to ease before conclusion,” said Eva Warigia, the executive director at the East Africa Venture Capital Association (EAVCA), told the East African.
EAVCA is the organization for private equity and venture capital firms operating in East Africa.
Uganda came in at a distant second with a total of six deals recorded this year, while Ethiopia, whose profile has been steadily rising among the investing community, recorded five transactions.
Rwanda had two while Tanzania had one transaction, data from EAVCA shows.
Private equity investment activity was spread across multiple sectors from education, with an investment by Fanisi Capital in Kitengela Group of Schools, to healthcare in Tanzania, with Leapfrog Investments’ acquisition of a stake in Pyramid Group.
The year also saw a $47.5 million investment in technology firm Cellulant, reinforcing East Africa’s position as a tech hub.
Ethiopia’s jump from no deals in 2017 to five closed this year, was largely attributed to the growing network of country focused funds.
Cepheus Growth Capital Partners, a fund dedicated exclusively to investing in Ethiopia, closed its maiden fund at $100 million.
Zoscales Partners, another Ethiopia-focused fund with $75 million in assets under management, closed two deals in the manufacturing and consumer sectors. Catalyst said that mid-sized firms in Tanzania, Ethiopia and Uganda will get about a quarter of the raised funds ($38.3 million), while a maximum of 20 per cent will target investment opportunities in new markets in Rwanda, the Democratic Republic of Congo and Zambia. (Daily Monitor)