Anatomy of an exit 🔎
Exits follow roughly the same patterns as investments on the continent with Big Four HQs, fintech and all-male founding teams topping the charts
When investors - especially early ones - enter the cap table of a start-up, it is almost always with the expectation that they will eventually leave it. Some might want to flip their investment quickly. Others are in it for the long run. All are expecting to make a profit in the process, both for their LPs and for themselves. Given the relative youth of the start-up investment scene in Africa, the lower volumes compared to other regions, and the secrecy that generally tends to surround exits, there is a dearth of information about them. The title might be overselling it a bit, but as we recently added 100+ exits to our deals database, we thought it was worth a closer look.
Since 2020 - and as of late October 2022 -, we have been able to track 100 exits on the continent. Now, there is a chance we’ve missed some, as they won’t always be made public. When they are, very rarely will the amount of the transaction be publicly disclosed. Except in a few cases (less than 10%), it isn’t. Anecdotal evidence tells us they mostly range from a million dollars or so, to hundreds of millions, especially in the fintech space. Think Worldremit’s acquisition of Sendwave ($500m), DPO Group’s acquisition by Network International ($288m), or Stripe buying Paystack for $200m in 2020. Actually fintech - “as always” - is leading the charge with a third of the exits since 2020, followed by Logistics & Transport and Retail. There have been exits in virtually every sector, with some probably involving much larger amounts than others. Think Energy and the recent acquisition of PEG Africa by Bboxx ($200m, some say?). In terms of geographies, unsurprisingly 79% of the exits involved start-ups HQ’ed in one of the Big Four. That said, what is unusual is to find Nigeria only at #3, with Egypt at #2, and South Africa in the lead: a third of all tracked exits since 2020 have happened in the rainbow nation. In 2022 so far though, Egypt is outperforming South Africa, perhaps a consequence of South Africa’s overall underperformance. Finally, and as a result of the severe underrepresentation of women in investment rounds, male-only founded start-ups represent 84% of the exits, and male-led start-ups 90%.
If you have info about exits you think we’re missing, we would love to hear from you. We’re happy to treat the information confidentially, and only include in the database the data points you are comfortable sharing. But the more the better! Oh, and we still need a tiny little push to reach our 6,000 subscribers milestone, so if you haven’t talked about this newsletter to your nan or to your cat… it’s time!