Harith takes control of Malawi's Open Connect, Vantage exits New GX Capital, Goodwell launches new impact fund

September 10th, 2018

The weekly roundup of Africa's Private Capital news

For your colleagues interested in their own subscription, please email us today

Welcome to the latest weekly wrap of the most interesting Africa-related private equity, infrastructure and venture capital deal stories, market opinion articles and information pieces.

Many thanks for being a reader. As a reminder, if any of your colleagues or business partners would like to join you and have access to all that an Africa Capital Digest membership offers, they can join easily by clicking here or emailing me at [email protected].

Regards,

-Allan

Allan Cunningham

Editor & Publisher

This week's issue supported by...

The Week in Brief...

Last week was a varied one for the private capital ecosystem in Africa. An exit for a mezzanine fund, an investment for an infrastructure fund, DFI commitments to funds currently in market and a couple of interesting venture deals all made the news. Let's start with the exit.

Vantage Capital has exited its investment in New GX Capital, marking the first full exit for the mezzanine debt fund manager's $288 million third fund. Vantage had originally provided the family- owned investment company an expansion capital facility totaling $20 million in 2016 which has now been repaid, earning the fund's investors a return of over 35%.

New GX used the capital to finance additional investments in a number of sectors including telecoms infrastructure, energy, waste management and information technology, in South Africa and elsewhere on the continent. Apparently, the investments made over the past two years have more than doubled the group's net asset value.

Harith General Partners have added another asset to their telecoms portfolio, buying a controlling stake in Open Connect. The pan-African infrastructure investment firm is investing $24.1 million in the fibre network provider on behalf of Pan African Infrastructure Development 2, earning it a 60% stake. The capital will support Open Connect's plans to upgrade its service offering through a major revamp which will enable the company to continue to provide excellent connectivity to its customers and maintain its competitive advantage.

Of the two venture deals we covered this week, the largest comes to us courtesy of Partech Africa. The fund manager is making its second deal on behalf of the Africa fund, leading a $16 million Series B round for Yoco, a South Africa-based Point of Sale Payments Provider. Orange Digital Ventures and FMO, the Dutch development bank also took part, as did Quona Capital and Velocity Capital, who both backed Yoco's Series A round.

Tizeti, a wireless broadband internet services provider with operations in Lagos, has raised its Series A round from a group of new and returning investors led by 4DX Ventures. Tizeti raised $3 million for the round, with participation from existing investors who backed the company's $2.1 million seed round in 2017. The capital injection will allow the company to launch a new consumer facing brand Wifi.Africa in the neighbouring country of Ghana by the end of this year as well as make additional investments in operations and product development.

In response to growing demand from private investors, family offices and foundations,

Goodwell Investments is launching a new impact fund for sub-Saharan Africa. The fund, Goodwell IV, is looking to raise €20 million (approximately $23 million) by the end of 2019.

The new fund will be invested in rapidly growing companies whose products and services meet the needs of the continent's unserved and underserved population. About half the fund's capital will be invested in financial services companies, with the balance being earmarked for opportunities in agriculture, health and sanitation, energy, and transport.

The African Development Bank's Board of Directors has approved an equity investment in Verod Capital's third fund which is currently in market looking to raise $150 million. The Bank is making a $15 million investment in Verod Capital Growth III, which will back private equity opportunities in high growth middle market companies in Anglophone West Africa.

While Fund III is a generalist fund, it seems likely that the fund will source its opportunities in sectors in which it made investments with its two previous funds. These include rapidly growing industries such as light manufacturing, consumer goods and services, business services, agriculture, education and financial services.

The European Investment Bank's Board is set to evaluate potential commitments to two new Africa-focused funds. The first, the Titan VC Fund, is a planned $65 million fund which will target opportunities in North Africa. The EIB is considering an investment of $15 million in the fund, which will back SME technology companies in Algeria, Morocco and Tunisia, with a particular focus on those firms developing big data, artificial intelligence and machine learning solutions.

The second fund to potentially benefits from EIB's support is a new debt and mezzanine fund being raised by responsAbility Investments. The fund will back energy access companies that provide distributed generation solutions (primarily based on solar energy) to households and small and medium-sized enterprises mainly Africa and Asia.

We end with a couple of personnel and company information. CDC has appointed a new Deputy Chief Investment Officer to oversee the development finance institution's higher-risk investment and portfolio management strategy. Yasemin Saktuk Lamy will be responsible for the investment processes, financial performance and development impact assessment of CDC's higher risk investments.

And fund administration specialist JTC plc has made another acquisition. The firm's buying Minerva, a Jersey-headquartered provider of private client, corporate, fund and treasury services in a move which adds a new office to JTC's global network and further expands its reach in sub-Saharan Africa, India and Asia.

That's it for this week. As always, you can review these and other stories by scrolling down and clicking through to them below.

Harith General Partners takes a controlling stake in Malawi's largest fibre network provider

Deal News...

Private Equity

Harith buys control stake in Malawi's largest fibre firm

// africacapitaldigest.com

Harith General Partners have added another asset to its telecoms portfolio, buying a controlling stake on Open Connect Ltd...