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(Ecofin Agency) – The year 2021 saw a rise in private equity and venture capital financing in Africa, driven by opportunities in the post-pandemic period.
The overall value of non-bank and non-market financing transactions on the continent last year reached at least $10.7 billion. Based on official market data, this figure may be higher, because of the 703 operations identified (only 445 are reported).
The overall value available for 2021 is 205% higher than that available for 2020 ($3.5 billion). It is also the highest value of financing announcements outside of commercial banks and stock markets since 2018, when a record $13.8 billion was reached. The number of deals in 2021 (703) is also a record never reached before.
The alternative financing activities cover private equity funding, the various stages of venture capital (series A,B,C,D,E) with amounts exceeding $4 billion. They also include debt financings and pre- or post-IPO financings.
This strong dynamic for such activities in 2021 reflects investors’ renewed confidence in Africa’s potential. Foreign direct investment flows to the continent also improved significantly, UNCTAD revealed. However, compared to other regions, the volume of alternative financing announced for African companies remains quite low. Also, the top 10 deals are valued at $5.5 billion, or more than half of the total.
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