Weekly Wrap, May 15th, 2017; Catalyst Principal, Quona, 500 Startups and others make private capital news last week
Last week in brief…May 15th, 2017
Hopefully, small proves to be beautiful for the Africa-focused private equity investors making deals last week. Because, the common theme of the week was deals of the smaller variety. Not that they don’t have big plans. They do.
Fresh from holding a first close for its second fund in early April, Catalyst Principal Partners has completed the first investment for the fund by acquiring Jambo Biscuits from the Dawda family. The transaction is being executed via a newly-formed company, Britania Foods, whose name is derived from Jambo’s flagship biscuit brand, well-known in Kenya.
As well as providing Britania Foods with an injection of working capital, Catalyst plans to support the portfolio company strategically, improving its technical capabilities, management skills, corporate governance as well as reinforcing the company’s distribution network. As part of the deal, Catalyst has appointed Robert Kagundah, an experienced executive whose worked in multiple African markets managing regional FMCG businesses, including The Coca-Cola Company.
DOB Equity has become the latest investor to back Africa Logistics Properties, (ALP), a developer and manager of Grade A warehousing in Nairobi. The Dutch family office is investing $4 million in the firm for an undisclosed stake.
The fresh capital will be used to support Africa Logistic Properties’ warehouse development plans as well as its expansion plans across the broader East Africa region. In early March, a consortium of investors made up of UK development finance institution CDC, the IFC, Maris Capital and Mbuyu Capital Partners jointly invested $48 million in ALP which was recently set up to take advantage of the opportunity provided by the lack of quality, international-standard warehousing space in the region.
Quona Capital, via the $141 million Accion Frontier Inclusion Fund which closed in March this year, is backing AllLife, a life insurance company providing cover for those with HIV and diabetes in South Africa. Financial terms of the deal were not disclosed.
The transaction is the tenth deal for the fund which closed with commitments totaling $141 million in March this year and marks the first foray into the insuretech space for the fintech-focused investment vehicle. The capital is being earmarked to support the company’s product development plans and its expansion priorities in new countries outside South Africa.
The Moringa Partnership, an impact investor, is making its second deal in Africa, backing Asante Capital EPZ, a Kenyan agroforestry business founded in 2015, with $6 million. The size of the stake and other terms of the deal were not disclosed.
The fresh capital will help Asante scale its operations to support its expansion plans. The firm develops tree plantations and tropical crops, and an initial $3 million of the investment will be used to support the development of a plywood industry in the East African country as well as kick-start the production of essential oils and food products.
Staying in the realm of impact investing, two funds backed Investisseurs & Partenaires’ impact fund-of-funds, IP Développement II, have recently made investments in Senegal and Burkina Faso. In backing OuiCarry, a Senegalese delivery service operator, Teranga Capital is making its first investment for its €5 million fund, whilst Sinergi Burkhina is adding a second company, AgroServ, to its €2.5 million fund’s portfolio.
In fundraising news, 500 Startups, a globally-focused venture capital firm headquartered in Silicon Valley, announced that it has held a first close for its MENA-focused fund last week. The 500 Startups MENA fund, which is also known as 500 Falcons, landed $15 million of the $30 million it is targeting for investment in early-stage startups in the MENA region.
Among the LPs making commitments to the fund’s first close are the Oman Investment Fund and the Qatar Science and Technology Park. According to 500 Startups, about 50% of the fund will be invested in between 100 and 150 companies, with the balance of the fund held for follow-on investment in the top 20% of the portfolio
Meanwhile, Àrgentil Capital Management has launched the raise for its second fund, a generalist equity/debt fund that will target opportunities in small and mid-sized businesses in Nigeria. The new fund has already received commitments from three investors who participated in Àrgentil’s first fund, which is now in the process of being fully realized and wound down.
Àrgentil Principal Investment Portfolio II or APIP II is initially targeting a final close $12.5 million and is hoping to deliver investors an IRR of 25%. The fund’s strategy will be to allocate between $100,000 and $1 million in its deals, investing in both debt and equity instruments.
Finally, the Financial Times had a couple of interesting pieces that caught our eye last week. In the first, it reports that private companies and private equity firms are sensing promising investment opportunities in the healthcare sector on the continent as more and more of Africa’s consumers can increasingly afford treatment.
And in the second, Jim Roth, one of the founders of LeapFrog Investments, explains how the decade-old emerging markets specialist investor has grown since its launch and his conviction that capitalism can have a transformative social impact.
As always, you can review these and other stories by clicking through to this week’s complete issue of Africa Capital Digest.