Africa Data Insight (Year-End 2018)
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Africa private capital fundraising in 2018 rose 22%, year over year, indicating that although some global investors have pulled away from the region, Africa-focused GPs are gearing up to take advantage of a less competitive deal-making landscape. Fund managers raised USD1.6 billion for growth equity strategies in 2018, representing a nearly twofold increase from 2017. Growth fundraising and improving economic prospects may help reverse the recent decline in growth-stage deals, which dipped to 51 in 2018 from a peak 101 in 2013. While deal activity in Cote d’Ivoire, Egypt, and Morocco showed signs of recovery in 2018, the pace of new investments in others like Nigeria and the DRC slowed, contributing to a 43% year-over-year decline in disclosed capital invested in the region. However, Africa’s technology ecosystems are proving fertile ground for the emergence of venture capital (VC), as fund managers executed 34 VC deals in 2018. Similarly, a record-high USD252 million accrued to seven VC funds, all of which are still seeking commitments. As African economies shake off the effects of commodity price and financial market volatility, new business models will help fuel growth and transformation in the region.