Weekly Wrap, October 18th, 2021; Inspired Evolution leads follow-on round for d.light, Summit Africa closes $100m+ fund, Adenia backs Kenyan rose grower, and more…

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Last week in brief…October 18th, 2021

A slew of fundraising news items made up a lot of last week’s issue of Africa Capital Digest. In terms of closes, the biggest was for African Infrastructure Investment Managers‘ IDEAS Managed fund, a permanent infrastructure investment vehicle, which the South Africa-headquartered investment firm opened up for additional commitments earlier this year. In wrapping up the capital increase, the fund now has an additional R5.5 billion (or $370 million) in commitments from a total of nineteen investors, some new and some returning. The final total handily beat AIIM’s original goal of $301 million for the raise and expands the size of the fund to more than $1.475 billion.

Staying in South Africa, Summit Africa held the final close for the firm’s maiden private equity fund. Summit Private Equity Fund I (SPEF I) now has a total of R1.6 billion (or approximately $115 million) for impact-focused investments in the common monetary area countries of South Africa, Namibia, Lesotho, and Eswatini. The investors in the fund are a mix of international and local institutions and include Britain’s CDC Group, Thuso Partners, and 27Four‘s Black Business Growth Fund. The fund’s investment strategy is guided by the United Nations’ SDGs and will target deals in the healthcare, education, financial services, and ICT services sectors.

Interest in private credit funds targeting African opportunities was on show last week. Debt provider Lendable has announced the launch of a new $100 million closed-end fund to provide credit to African and Asian fintechs which will use the capital to offer credit facilities to micro, small, and medium enterprises in the markets they operate in. Several DFIs, such as DFC, BIO, and FMO, as well as impact investors like Ceniarth and Calvert Impact Capital, have already invested in the fund which has raised $49 million so far.

Afreximbank‘s Fund for Export Development Africa and Gateway Partners are teaming up to launch a new credit fund for the continent. The joint venture is the first partnership between an African development finance institution and an alternative investment manager. The Africa Credit Opportunities Fund will back opportunities across the continent with structured credit instruments, helping to promote and support intra-African trade and the development of value-added exports for Africa.

Investment in Africa’s energy sector is bound to get a boost from Actis‘s latest sector fund. The growth markets investor set out to raise $4 billion for Actis Energy 5 and has seen healthy levels of demand from investors helping it significantly beat its target for the fund which now has $6 billion of investable capital for a portfolio of assets in Africa, Latin America, and Asia. The fund’s LP mix is made up of a diversified group of investors including pension funds, insurance companies, endowments, and sovereign wealth funds.

In terms of deals, Inspired Evolution is leading a group of other returning investors backing solar energy firm d.light‘s latest capital raising round. Between them, the six investors are putting $15 million to work in the business which will use the money to bolster its balance sheet, allowing it to boost its on-balance sheet and off-balance sheet activities to grow its business into new markets. d.light plans to expand its operations into East Africa and West Africa, with an initial focus on Kenya, Nigeria, Tanzania, and Uganda.

In Kenya, Adenia Partners has acquired a majority stake in a rose producer which sells its output to wholesalers supplying the cut flower markets in Russia and countries in East and Central Europe. The deal for Altilands, the operator of Red Lands Roses, adds the seventh asset to Adenia’s fourth private equity fund. The company’s solid reputation for quality, its use of advanced farming practices, and its direct sales channel to the wholesale markets rather than reliance on sales auctions typical in the industry seem to have been key factors in Adenia’s decision to invest.

AfricInvest‘s evergreen financial services platform FIVE has made its second insurance deal in as many weeks. The private equity fund manager announced a deal in RAYNAL, Burkina Faso’s third-largest non-life insurer. As part of the deal, Omar Bekkali, a Partner at AfricInvest, joins RAYNAL’s board of directors. The private equity firm’s team will work with the insurance company to boost its distribution model and expand its current client base of 100,000 end-users.

London-based TLG Capital has invested debt in FairMoney, a fintech with a microfinance bank license that operates a neo-banking platform in Nigeria. The financing is being provided by TLG Capital’s Africa Growth Impact Fund which can invest as much as $5 million, depending on FairMoney’s achievement of certain milestones. The company will use the capital to help build the size of its loan book. The tenor of the debt is being structured individually for each tranche.

And finally, we covered two corporate venture deals last week. EMURGO Africa, a unit of blockchain platform Cardano’s $100 million investment arm, is seeding Adanian Labs, a pan-African venture studio that aims to build 300 technology startups across the continent. The amount of capital being invested remains unclear, although it is in excess of $1 million.

In the second, an investment in Sudan’s largest digital classifieds and marketplace by Egyptian mobile payments platform Fawry marks the first significant foreign investment in a technology business in the country since sanctions were lifted in 2020. The investor group, which consists of western venture capital firms as well as Fawry, is investing $5 million into alsoug, which will use the capital to expand its presence in the fintech sector.

That’s it for this week. As always, you can review these and other stories by clicking through to this week’s preview edition of the newsletter.

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