And now the EXITS courtesy of the Pandemic

On 9th September 2020, US based blockchain investor, Digital Currency Group (DCG) bought Naspers-backed South African cryptocurrency exchange Luno and Transactions Capital took a $109M position in WeBuyCars also from South Africa.

According to Bloomberg, WorldRemit acquired Sendwave for $500M on 25th August 2020. In late July, Network International, a Dubai-headquartered enabler of commerce bought Africa’s leading online commerce platform, DPO Group, for $288M.

But it all started in January when Circles Gas acquired KopaGas’ proprietary technology for $25M.

These are signs of the times – the EXITS are finally here. But it been a long time coming since 1999, when Mark Shuttleworth had the first exit of selling Thawte to Verisign for $575M.

Since then, there have been spates of exits, like Visa’s acquisition of Fundamo for $110M, and others that have not being disclosed.

The Covid-19 pandemic has not only catalyzed M&A activities, but now we are beginning to see a new wave of exits sweeping the industry and it is just the tip of the iceberg because:

1. The pandemic created a ripple effect from the dislocation of other sectors and asset classes whilst
2. The Application (tech) industry in Africa has come of age almost two decades later.

When Mobile was introduced in Africa in 1993 by Vodacom , it was least known to be a profitable venture.

Then came the Internet Service Providers (ISPs) with Internet services in 1994 and then in 2004 the Mobile Network Operators (MNOs) ventured into providing Internet services on the mobile device.

In 2001, Africa’s first submarine fiber cable SAT3 had been launched, but it was not until 2009 that multiple cables connected the continent to the rest of the world. The submarine cables brought high speed Internet connectivity to the mobile devices that had proliferated across the continent, making Africa not only a mobile-first but a mobile-web continent.

Many African till today see the web primarily through their mobile device.

In 2014, Freshfields Bruckhaus Deringer conducted a study of the sector, looking at the performance of forty Telecom, Media and Technology (TMT) companies across eighteen stock markets in Africa over the decade and concluded that the TMT sector out-performed Oil and Gas, as well as the Africa MSCI Index as presented in the graph below.