The year 2021 has set many new standards for Africa’s tech ecosystem. As reporter Alexander Onwukwue states, “It’s the year African startups normalised $100 million rounds.” It’s the year francophone Africa produced its first unicorn, Wave, which raised $200 million at a $1.7 billion valuation.
It’s also the year of mergers and acquisitions, with over 333 M&A deals worth $51 billion done in the first half of the year alone, a 567% increase in deal value from 2020’s $8 billion. Following Stripe’s acquisition of Paystack in a $200 million deal in 2020, quite a number of notable acquisitions have occurred. From Flutterwave’s acquisition of Disha, MaxAB’s acquisition of Morocco’s WaystoCap, and even Piggyvest’s acquisition of Savi, companies in the ecosystem are consolidating to solve some of the continent’s taxing issues.
One of the biggest acquisition deals of 2021 is MFS Africa’s deal with Capricorn. In October, MFS Africa—the largest fintech interoperability hub in Africa—signed a deal to acquire Capricorn Digital, one of Nigeria’s largest digital solutions and distribution companies. While the amount is undisclosed, both parties confirmed that the deal is Nigeria’s “second-largest” fintech acquisition deal, second only to Paystack’s $200 million acquisition deal with Stripe.
But how do hundred-million-dollar deals get made? And why are more startups hitching their wagons together? On December 3, TechCabal brought Dare Okoudjou, MFS Africa CEO, and Degbola Abudu, co-founder of Capricorn together in a live session to answer some of these questions.
Big deals start out small
For Dare Okoudjou—who has led MFS Africa’s growth in 35 African countries—big deals and acquisitions don’t always start out as big deals. “Big deals are done over time, and sometimes, they start off as minority investments talks which evolve into acquisition talks,” he said. “The first time Degbola and I spoke in 2014, Capricorn had just started and we—MFS Africa—we’re trying to help him raise money. Fast forward to 2020, and we’re speaking about acquisitions.”
Credit and More:
https://techcabal.com/2021/12/13/how-african-startups-can-build-multi-million-dollar-partnerships-and-acquisitions/
