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Lagos Leads as Africa Private Equity Deals Surge to $7.4bn

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Africa Private equity investments rose to record breaking levels in 2021, led by Lagos, Nigeria, the West African region, which accounted for the majority of private capital deals in 2021 as highlighted by AVCA’s latest African Private Capital Activity Report.

The $7.4 billion in private capital deal value more than doubled 2020’s total of $3.4 billion, surpassed the previous record of $4.8 billion reached in 2017, and represented an 85% increase compared to the historical annual average deal value over the period 2016-2020 ($4 billion).

The volume of private capital deals recorded in Africa, in 2021, also reached a record high of 429. Venture capital super-sized deals (deals above US$100mn) significantly contributed to this deal value increase, accounting for 32% of the total investment value.

Overall, investments in early-stage companies gained significant momentum attracting 54% (US$4bn) of the total value reported on the continent last year.

West Africa attracted the largest share of deal volume at 33%, while large multi-region deals with operation across different regions within Africa accounted for the largest share by value (40%).

The deal volume reported in West Africa was dominated by Nigeria, the largest economy on the continent, which concentrated 69% of the region’s total deal volume in 2021.

West Africa’s increase in deal activity was driven by venture capital investments, which accounted for 86% of all deals reported within the region. Fintech dominated West Africa’s venture capital scene attracting 45% of the total number of venture capital deals

An example of a large multi-region deal announced in 2021 was TPG’s US$200mn investment in Airtel Mobile Commerce BV, which is the holding company for several of Airtel Africa’s mobile money operations and operates across multiple countries within Africa.

Financials emerged as the most active sector in 2021 accounting for 30% of the total deal volume, and 39% of the total deal value.

The largest deal within Africa’s Financials sector was the US$400mn investment in Africa-focused fintech company, OPay, from a consortium of investors in August 2021.

There was also a marked increase in co-investments by LPs and other investors in 2021, further demonstrating widespread confidence in Africa’s long term growth fundamentals.

Southern Africa fell behind West Africa in terms of deal volume in 2021 and accounted for the second largest share of private capital deals (20%) with South Africa – the region’s most mature and sophisticated market for private capital – attracting 78% of the deal activity.

North Africa’s increasing share of deal volume has been driven by the growing interest of investors in Egypt, which has emerged as a prominent hub for venture capital investments. In 2021, North Africa accounted for the third largest share of deal volume (17%), with Egypt attracting 69% of the region’s deal activity by volume.

East Africa’s declining share of deal volume and value does not reflect a decrease in investors’ appetite for investment opportunities within the region but rather indicates the strong dynamic of other regions. In 2021, East Africa attracted the fourth largest share of deal volume, with Kenya accounting for 66% of the total deal volume followed by Uganda (13%).

Although Central Africa has attracted the smallest share of the volume of private capital deals on the continent, the region has seen a handful of large deals in infrastructure related sectors that have significantly affected the region’s share of deal value within Africa.

In 2021, Central Africa accounted for 14% of the total deal value, driven by large infrastructure projects in Gabon’s transportation and renewable energy sectors. A notable example is the Meridiam and Gabon Power Company’s financing of Kinguélé Aval hydroelectric power plant in Gabon, which reached its financial close in July 2021.

In 2021, Financials experienced remarkable growth, attracting the largest share (30% and 39% respectively) of the total volume and value of investments reported in Africa.

This was the result of a handful of large deals in fintech companies operating across the continent. Some notable examples within Africa’s fintech space include the Series C investment round in Chipper Cash, an Africa cross-border payments company, which raised a combined US$250mn in May and November 2021 by a wide range of investors; the US$120mn investment in the Egyptian fintech, MNT-Halan, in September 2021 by a consortium of global investors.

The growth of the Financial Sector is further highlighted by the historical trend since Financials’ share of deal volume and value increased to 24% and 29% in 2019-2021, from 13% and 7% respectively in 2016-2018. Fund managers have also invested in sectors that help plug Africa’s infrastructure deficit such as Utilities, Communication Services, and Transport.

Utilities attracted a substantial share of private capital investments by value (18%) from 2016 to 2021, because of the significant capital required to construct renewable energy projects, which accounted for the majority of the value of the Utilities sector.


Private capital investment will continue to be targeted at Financial Services, Technology, Consumer Goods & Services, and Infrastructure sectors, according to the African Private Equity and Venture Capital Association, AVCA.

The Financials Services sector, driven by outstanding growth in Africa’s fintech space, emerged as 2021’s most prominent sector.

The rapid growth of mobile and internet penetration in Africa, coupled with challenges related to traditional banking infrastructure and services, have laid the foundation for fintech to flourish and transform the financial services sector in Africa.

Additionally, technology with its power to disrupt and transform the development of several other industries such as agribusiness, healthcare, mobility will also continue to be on investors’ radar.

Infrastructure related sectors such as transportation, renewable energy, digital infrastructure, and utilities are also expected to experience significant growth. In 2021, infrastructure fundraising reached record levels, accounting for almost half (45%) of the total value of final closed funds, and 40% of the total value of interim closes.

With several large infrastructure funds about to reach their fundraising targets, we can expect significant development within the asset class as investors translate the continent’s infrastructural deficits to lucrative commercial opportunities with the potential for strong returns. Furthermore, with the consumer theme continuing to be prevalent in Africa’s private capital landscape, industries associated with consumer services and FMCGs remain attractive investment options. The relaxation of the travel restrictions, and the reopening of the economies will likely drive increasing interest in Africa’s hospitality sector.

Finally, in 2021 a record level of African startups managed to raise capital from a wide range of investors.

Investments in early-stage companies are poised for growth as Africa’s startup ecosystem continues to attract increasing levels of global attention. Looking forward, the future of private capital in Africa looks bright driven by the continent’s strong growth fundamentals, digital transformation, technology adoption, cross-country and cross-sector collaboration, and increasing levels of regional integration.


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