Private Equity and Venture Capital Terrain in Africa: 2021 Post Pandemic .
Investors growth pre and post pandemic Africa in private equity and venture capital has seen a vibrant investment in finance sector, fintech and cryptocurrency.
Africa leading data engagement platform, reported an average of 600 investors across Africa are active in business investment negotiations. Africa share of independent native private equity, venture capital finance managers are 400. The remaining two hundred are companies outside Africa with strong focus on African investment in their portfolio.
The concentration of these investors are in major African markets. South Africa is leading with 174 , Nigeria (63), Kenya (48), Mauritius (24), Egypt (20). Other investors outside Africa with strong African portfolio are USA (83) and whole of Europe (85). In the whole of Middle East and Asia, China is the only represented investor with (25) investing interests.
Investors preferences according to Asoko Insight research documentation, financial services and IT are on the top prefence list. Analysis by Africa Venture Capital Association ( AVCA) reveals that investment in tech based companies amount to 55% of all trade in Africa in 2020. Financial services, IT and consumer discretionary made up of 47% of investment trade in 2020.
On the size of investment financing, The African Report noted, “African investors are increasingly aligning their investment strategies with the strong demand for capital in the middle market. Close to 25% of investors record a preference for deals between $1m and $5m, followed closely by a preference for ticket sizes of $5m – $10m and $10m – $25, at just over 20% each.”
Pandemic Year Effect on Investment.
Private equity and ventures investment shows a decline in 2020. It recorded $3.8 billion in 2019, while pandemic shows a decline as $3.3 billion investment was recorded in 2020. The road to recovery is expected to start in 2021, though challenges of the pandemic lingers.
Global growth estimate shows that Africa is far behind, hope still abound for better landscape in private equity and capital venture investment.
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