COVID-19 Deals Blow To Private Equity investments in Africa

African private equity raised less cash for investments in 2020 compared with the previous year as a result of the economic fallout of the COVID-19 pandemic, the African Private Equity and Venture Capital Association (AVCA) said.

Private equity funds investing on the continent raised $1.2 billion last year, down from $3.9 billion the previous year, AVCA said in its Annual African Private Equity Data Tracker. African private equity raised $4.3 billion in 2015. “2020 saw a decrease in fundraising numbers, as a result of the economic effect of the pandemic,” the association said.

The coronavirus pandemic has stalled Africa’s growth momentum. Though the continent has started to recover, although, with regional disparities, full recovery is difficult to predict, the AVCA said.

The total value of private equity deals in Africa dropped to $3.3 billion last year, from $3.8 billion in 2019, due to the pandemic, the AVCA said.

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Deals announced during the period included Helios Investment Partners’ agreeing to acquire a stake in Africa Specialty Risk Group and Old Mutual Alternative Investments buying a stake in Sifiso Learning Group of South Africa.

AVCA said deals in technology-enabled companies accounted for more than half of the total deals in 2020. Healthtech, fintech, edtech, and agritech were among the top picks. “The pandemic and subsequent lockdown restrictions showcased the viability of some sectors and presented new investment opportunities.”

A total of $18.1 billion was raised by African private equity funds between 2015 and 2020, AVCA said. There were 1,257 private equity deals worth $21.7 billion during that period, the association added.