Investor activitySurveillance Africa

Banks invest equity and debt in Windlab deal, Google’s Africa fund backs Lori, New Verod-Kepple Africa fund wins Toyota Tsusho commitment, and more…

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Here’s Africa Capital Digest’s latest weekly wrap of the private capital deal and fundraising news from Africa – for our free newsletter, sign up here.

Last week in brief… Logistics and renewable energy were two well-represented investment sectors in Africa last week. We led with news that two of South Africa’s leading banks, RMB and Standard Bank, are investing a combination of equity and debt alongside other investors in the acquisition of Windlab Africa, a carveout from the global Windlab Group. The deal, which is being led by Seriti Green, a subsidiary of coal producer Seriti Resources, has a total value of R892 million (or about $55 million). The other investors participating in the transaction are Ntiso Investment Holdings and Peter Venn, Windlab’s managing director.

In addition to each investing $5.8 million of equity, RMB and Standard Bank are also providing over $1.5 million each in shareholder and management gearing as well as a total of $6 million as a bridge loan to Seriti Green. Windlab Africa’s new owners have bought all of Windlab’s South African assets and 75% of the firm’s assets in East Africa. The business has interests in 23 solar and wind projects at various stages of development which will deliver up to 3.5 GW of generating capacity once they are fully operational.

In another renewable energy deal, responsAbility Investments has agreed to provide long-term debt financing for two solar projects currently being built in Botswana. When completed, the projects will be adding a total of 4MW to the country’s grid following the signing of 25-year power purchase agreements with the Botswana Power Corporation, the state-owned utility. The terms of the debt, which is being provided on a nonrecourse project finance basis via two special purpose vehicles in Botswana, have not been disclosed.

The solar power plants are being constructed in Bobonong and Shakawe by Sturdee Energy, the developments’ equity provider. Sturdee will also operate the plants once they come online during the last quarter of this year.

Google‘s $50 million Africa Investment Fund is making its first investment in a logistics startup, backing Lori Systems‘ pre-Series B round. The deal for the Kenya-based e-logistics startup adds the third startup to the tech giant’s fund’s portfolio and reportedly values Lori at $110 million. The 2016-founded startup will use the capital to hire more people, develop its technology further, and add scale to its operations. According to Lori, $180 billion is spent on haulage every year in Africa, a market ripe with opportunity and ready for disruption.

In another logistics sector transaction, Durban-based Clearwater Capital has taken a significant minority stake in the South African unit of Fastway Couriers, a global firm. The private equity investment firm is co-investing in the business alongside City Logistics, another South African firm. City Logistics acquired Fastway’s Cape Town and Durban businesses last year, and now holds a 70% stake in the firm. The deal adds a small package delivery capability to City Logistics’ offering and makes the combined company one of the largest logistics providers to South Africa’s fashion, retail, and eCommerce sectors.

Verdant Capital announced the first investment for the firm’s $100 million hybrid capital fund last week. The Verdant Capital Hybrid Fund is making a $7 million debt investment in Watu Credit Uganda, an asset financing company, boosting the firm’s capacity to provide financing to the country’s motorbike taxi (locally known as “boda boda”) drivers in the East African country.

The debt investment strengthens Watu’s balance sheet and is expected to catalyze more senior debt funding from other investors. WAtu’s business is financing the purchase of motorbikes for drivers, who then pay back the loan from their earnings until they own the vehicle. These motorbikes are very often the principal source of income for their drivers and the financing helps them participate in the economy, attain financial stability, and build tangible wealth through eventually owning a vehicle.

In venture news, Aruwa Capital Management has led a group of investors backing a seed round for Koolboks, a provider of cold storage equipment to businesses and consumers in Africa. The investor group is investing a total of $2.5 million in the firm, lifting the amount of capital raised by the startup to $3.5 million since it was founded in 2018. As part of the deal, Aruwa Capital and Acumen will have representation on Koolboks’s board of directors.

A new venture fund managed by Verod-Kepple Africa Partners, a joint venture between Nigeria’s Verod Capital and Japan’s Kepple Africa Ventures, has landed a commitment from Toyota Tsusho, part of the global Toyota Engineering group. The investment is aimed at supporting startups whose businesses and markets may have synergies with Toyota Tsusho’s activities on the continent. How much capital is being committed to the planned $100 million fund has not been disclosed.

Verod-Kepple Africa Partners will source investment opportunities in scalable, tech-enabled, and revenue-generating businesses that solve problems confronting businesses and consumers across Africa. While nominally sector-agnostic, the fund will pay particular attention to businesses operating in the healthcare, consumer goods, mobility, and carbon mitigation industries.

Microtraction, a Nigerian venture investor, has held the first close for its second fund, Microtraction Community, raising $15 million from PAVE Investments and a group of thirty or more angel investors made up of Founders of African startups like Paystack’s Shola AkinladeCowrywise’s Razaq Ahmad, and Paga’s Jay Alabraba. The community also includes GPs of several venture firms as well as other local and international high-net-worth investors, and sports and entertainment icons.

Ambit Partners, a two-year-old search fund investment firm with offices in Cape Town and Vancouver, has wrapped up fundraising for its first fund. Ambit Partners Fund I now has $26 million for investments in search funds around the world, with a particular focus on opportunities in new or emerging Search Fund markets. A search fund is an investment vehicle that backs entrepreneurs looking to acquire, manage, and grow a privately-led company. The fund Ambit I was anchored by Pags Group, Bain Capital co-founder Steve Pagliuca’s family office. Other investors in the Fund of Search Funds include Ethos Private Equity‘s founder André RouxJordan Park Group, and CrossBoundary.

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.

 

Source: Allan Cunningham | Linkedin.com

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