Africa Data Insight (Q3 2018)


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While new entrants have added diversity to the African private capital landscape in recent years, the most experienced firms have historically accounted for the vast majority of capital raised for the region. Consequently, with only three fund managers reaching closes for a fourth fund or later, fundraising for Africa declined by 42% year-on-year through the first three quarters of 2018. Investment activity has also slowed, but the venture capital (VC) space remains a relative bright spot. VC deals accounted for 27% of investments completed in the region in Q1-Q3 2018, with the tech ecosystems emerging across the continent proving to be a source of deal flow for traditional PE fund managers. Indeed, growth funds participated in seven VC rounds in Q1-Q3 2018, albeit in later-stage companies. Kenya—and the startup scene in Nairobi in particular—has drawn sustained investor interest in recent years, but deal count for the country in Q1-Q3 2018 was nevertheless off the previous year’s pace. In contrast, investment activity in South Africa has rebounded in the wake of a change of government in February and an exit from recession in the third quarter.