Stears records 73 private market deals in Q3'24

Private capital deployment in Africa has been a topic of increasing interest, with the third quarter of 2024 showing promising signs of growth and resilience in the face of macroeconomic challenges. According to data from Stears, 73 private market deals were conducted during this period, with 39 deals disclosing a combined value of $2.27 billion. The breakdown of trends in private capital deployment reveals that South Africa, Kenya, Nigeria, Ghana, and Egypt collectively accounted for 85% of all deals, highlighting their continued appeal to investors. Michael Famoroti, Head of Intelligence and Co-Founder of Stears, recently shared insights on these findings in an interview on CNBC Africa. Famoroti noted that despite negative macro news affecting several African countries, investor appetite remained strong, particularly in sectors such as financial services, agriculture, and energy. Notably, international funds are increasingly focusing on sustainability, gender balance, and digital access, leading to heightened interest in these sectors. Key Points: 1. Regional Trends: Southern, eastern, and western Africa led the way in private capital deployment during Q3 2024. However, it was surprising to see that in terms of single-country investments, South Africa and Kenya outshined larger economies like Egypt and Nigeria. 2. Seasonal Trends: Famoroti highlighted a seasonal dip in private capital activity during Q3, often referred to as the 'summer lull.' Despite this, deal activity picked up in September, indicating a positive trajectory leading into the end of the year. Notable deals, such as the $110 million investment in Moneypoint, showcased ongoing confidence in the continent's long-term prospects. 3. Funding Dynamics: While startup ecosystems in Africa have flourished, there has been a shift towards larger private equity funds participating in later-stage funding rounds. This trend is crucial for enabling promising startups to scale effectively. Additionally, an increase in debt funding, particularly in sectors like agriculture and energy, highlights a growing diversification in investment vehicles across the continent. In conclusion, the private capital landscape in Africa presents a mix of opportunities and challenges, with resilience and innovation driving growth in key sectors. As the year progresses, investors are likely to maintain interest in high-potential markets, paving the way for continued development and investment in the region.