TLDR:
– Venture capital deals in East Africa outpaced total corporate finance deals in the first six months of 2024
– VC accounted for 38% of the deals, while mergers and acquisitions accounted for 22%
According to new data, the volume of investment deals made by venture capital (VC) firms in East Africa surpassed total corporate finance deals in the first half of 2024. VC deals accounted for 38% of the 68 disclosed investment deals registered between January and June 2024, with a total transaction value of $1.02 billion. This dominance of VC deals signals a shift in the investment landscape in the region, with VC providing seed capital to start-ups that need cash to set up operations, develop new products, or supply chains. Private equity, on the other hand, is capital for young, middle-stage companies looking to expand operations and explore new markets. Despite the challenging economic conditions affecting businesses and investor sentiment in the region, foreign investors see African markets as the last global growth frontier and believe strong growth opportunities need to be seized early to reap big rewards later. The agribusiness, manufacturing, and energy sectors were among the top sectors generating corporate finance deals in the first half of 2024, with notable investments also seen in financial services, ICT, telecommunications, real estate, and healthcare services sectors. The dominance of venture capital players in the transaction stream is likely to continue for the rest of the year.
