Top Startup Acquisitions In Africa, 2019

2019 has been an eventful year in the African startup ecosystem. As expected, a number of startups have raised funding, with over 60 startups raising funding of USD 1 Mn and above.

The year has also seen some interesting ‘first-ever’ acquisitions, cutting across a variety of sectors namely transportation, healthtech, fintech, e-commerce and renewable energy, among others. What’s more, typical norms in acquisitions were also overturned as in one instance, a younger startup acquired an older company.

Below are some noteworthy acquisitions of 2019.

Nigerian tech hub CcHub acquires Nairobi’s iHub

Now this was unique, seeing as this was the first time an innovation hub acquires another. The Co-Creation Hub (CcHUb) is Nigeria’s multifaceted innovation hub that doubles up as a seed fund while iHub is known as the tech innovation center for East Africa.

In a deal that was sealed in September whose value remains undisclosed, iHub went under the leadership of Bosun Tijani, CEO of Nigeria’s CcHub but Nekesa Were remained the Managing Director of iHub. iHub would also continue with its existing programs, though CcHub would extend some of its activities in education, healthcare and governance to Kenya.

The deal between two of the most prominent tech hubs in Africa led to the creation of Africa’s mega-incubator.

Uber acquires its rival Careem

Though not of African origin, San Francisco-based Uber has been operating in a number of East and South African countries, and some in West Africa. Its rival, Dubai-based Careem has also been operating in North Africa, reportedly in more cities than Uber in the region.

The acquisition was undoubtedly the biggest deal in the MENA region and one of the largest in the ride-hailing space. A much awaited acquisition, it saw many hindrances since plans of the acquisition were revealed.

However, the massive USD 3.1 Bn transaction finally happened in September with its closure expected to happen in the first quarter of 2020.

Under the transaction, Careem was to become a wholly-owned subsidiary of Uber, whilst maintaining its brand name and leadership by its founders.

However, all of its mobility, delivery and payment businesses in the Middle East and other major markets were to be acquired by Uber.

Nairobi’s DPO Group acquires SA payments processing service PayFast

With fintech being one of the sectors creating a buzz in the African startup ecosystem, it’s no surprise that there had to be an acquisition in the sector.

Reportedly a multi-million rand deal, the transaction was a cash and shares mix.

Following this deal, DPO Group, a leading African payment service provider, would be able to provide services to over 100 000 merchants across 18 African markets. PayFast management would also be key shareholders in DPO Group.

But this is not the first South African fintech the DPO group has acquired. DPO had earlier received a private equity investment from Apis Growth Fund, from which it used USD 7 Mn to acquire another South African payments service provider, PayGate in 2017.

Engie acquires African off-grid solar company, Mobisol

This was an acquisition which made Engie, a french energy company become a leading off-grid solar energy provider in Africa. Mobisol, founded in 2011, is a Berlin-based off-grid solutions provider, with its African headquarters in Nairobi. The firm had reportedly installed more than 150 000 solar home systems in Kenya, Tanzania and Rwanda.

Under this acquisition, Engie would provide solar solutions in three more countries to bring its total number of countries served to nine. Engie would also diversify its portfolio by merging Mobisol’s products with its own Fenix solar home systems.

In 2017, Engie had acquired Fenix, also a solar home systems provider which served around 2.5 million people in six countries.

RiseUp acquires Menabytes

MENA-focused tech publication Menabytes was in August this year acquired by RiseUp, an Egyptian platform known for organizing a leading entrepreneurship event in the MENA region, as well as availing requisite resources to startups and entrepreneurs.

The acquisition of undisclosed amount involved intergration of RiseUp’s digital content arm and Menabytes. trackMENA, a data platform that tracks startups, investments and related events in the ecosystem was also acquired.

Zubair Paracha who founded Menabytes in 2017 also joined RiseUp to continue leading Menabytes and trackMENA.

Menabytes was also granted full editorial autonomy despite being under RiseUp.

RiseUp acquires Egypt’s StarterHub

Two months after the Menabytes acquisition, RiseUp yet again acquired another company. This was the Egypt-based online startup community, Starterhub. This was in line with RiseUp’s strategy of becoming a one-stop-shop for resources needed by startups and entrepreneurs in the MENA region.

Under this acquisition, Starterhub rebranded to RiseUp Connect, to become a platform that would come up with initiatives and engaging content to drive community impact. Members of RiseUp Connect would also get more exposure in the ecosystem, along with resources and certain benefits.

The new division would be led by StarterHub’s founder, Amr Hussein , who would also go in as RiseUp’s Startup Community Manager.

Egypt’s Harmonica is acquired by MatchGroup

The online dating space also saw an acquisition this year. Match Group is a Dallas-headquartered giant in online dating, owning platforms like Tinder, OkCupid, PlentyOfFish among others.

Egypt’s Harmonica was founded in 2017 to help Muslim users find potential partners and has an Arabic-only app.

This acquisition that happened in August would see Match Group serve 33 countries in Asia and the MENA region that have a large Muslim population. Harmonica’s employees also joined the Match Group team to go ahead and create an English app as well.

Real Estate Portal Mubawab Buys Jumia House’s North African Portals 

Under this acquisition, Mubawab, a leading Moroccan real estate portal. would acquire portals of Jumia’s property vertical dubbed Jumia House in Morocco, Tunisia and Algeria. This will make Mubawab a leading real estate portal in North Africa seeing as Jumia House had already established itself as such.

Interestingly, Mubawab had also been previously acquired by Dubai’s Emerging Markets Property Group (EMPG) last year. A few months prior to this, EMPG had closed its Series D valued at USD 100 Mn while Jumia had filed to be listed on the New York Stock Exchange.

Nigerian fintech OneFi acquires Amplify

In a deal of an undisclosed amount, Amplify, a Nigerian payment solutions provider was acquired by OneFi (One Finance and Investment Limited).

Under the acquisition, OneFi took Amplify’s trademark, team and its client network of around 1000 merchants. OneFi also added its product offering, by on-boarding AmplifyPay and mTransfers to its portfolio, two of Amplify’s keynote products.

BRCK acquires Wi-Fi service provider Surf Kenya

Earlier this year, BRCK, a manufacturer of self-powered mobile Wi-Fi devices based in Nairobi acquired another internet service provider Surf Kenya, for an undisclosed amount.

Through this deal, BRCK became the largest public Wi-Fi network in Sub-Saharan Africa. Combined, the companies now offered over 2700 public hotspots across Kenya with an estimated 500 000 users a month.

Under the deal, Surf will continue offering its services though eventually it will shed off its branding. BRCK also purchased all of Surf’s assets and software intellectual property.

Ghana’s mPharma acquires Kenya’s Haltons

Halton, recognized as Kenya’s second largest pharmacy chain with 20 stores was acquired by healthtech startup mPharma. The move saw the Ghanian healthtech venture into the East African market for the first time.

mPharma founded in 2013 provides drug inventory management and financing solutions for pharmacies and their suppliers.

This deal, claimed to be valued at under USD 5 Mn, had come after mPharma had landed a Series B investment of over USD 9 Mn.

What makes this deal unique however is the fact that a younger startup of around six years, mPharma, acquired Haltons, an older company of around ten years. This could be attributed to Halton’s aim of improving drug accessibility and affordability, which bore the need for better inventory management if at all it was to realize this goal.

Under the deal, Haltons’ senior management would retain a stake in the business, but mPharma would take control of the business.

OLX is acquired by Jiji, the highest-ranked app in Nigeria’s e-commerce space

In a deal between the two online classified marketplaces, Jiji acquired Naspers-backed OLX under an agreement that OLX users will be redirected to Jiji’s platform. The said traffic would be from OLX branches in Ghana, Kenya, Tanzania and Uganda.

The move helped Jiji command a user base of around eight million active monthly users as well a serve a projected population of around three hundred million people.

Feature image courtesy: The Mountaineer