• by IGS

ICT, finance drive corporate deals in East Africa

The number of corporate deals in East Africa rose by 40 percent in the first eight months of the year compared to the corresponding period in 2021, driven by venture capital investments in ICT and financial services sectors.

In recent years, the deals landscape has been dominated by private equity investments into larger established businesses, mergers and acquisitions. The strong showing by venture capital funds this year, however, indicates that investors are seeking new opportunities in startups which have high potential for growth.

Early-stage investors, while taking on more risk in case the businesses fail, stand to make outsized returns if the start-up becomes a success, and its value rises in due course.

It is also a pointer to a return of optimism by external investors in the continued post-Covid recovery of the economy, especially in Kenya where the elections season came and passed without disruptions.

Deals analysis done by advisory firm I&M Burbidge Capital shows that in the eight months to August, the region recorded 91 deals, out of which 39 were venture capital investments, which eclipsed the 31 private equity and Development Finance Institution (DFI) investments and 15 merger and acquisition deals in the period.

In terms of sectors, ICT and telecommunications have dominated with a total of 33 deals this year, followed by financial services at 18. Logistics, healthcare and energy have six deals each, while there are five apiece for manufacturing and agribusiness.

-cited : Business Daily