Africa-Press – Kenya. African Private Equity and Venture Capital Association (AVCA) has announced its half-year result terming it one of the strongest ever recorded.
It attributes the performance to an increased volume of deals, 338 which have generated a cumulative value worth $4.7 billion (Sh567.9 billion).
The industry notes that the substantial amount of fresh capital raised by fund managers in 2021 as investors made deployments across various strategies and sectors, was among the factors that contributed to the strong deal activity.
An increasing interest in Africa’s venture ecosystem and the overall larger ticket sizes were also noted to have spurred the deals activity.
“Interest in Africa’s venture ecosystem has not only attracted international investors and supported the development of domestic venture capital firms, but has also encouraged pan-African private equity firms to broaden strategy to include a focus on venture capital,” AVCA says.
Financials was the most active sector in the half-year period attracting 103 private capital investments which was almost double the levels of the same period last year.
It was followed by the Industrials sector which also emerged as the second most active sector by value.
West Africa continued to dominate private capital deals by a volume of 34 per cent.
Senegal holds the third place, overtaking Côte d’Ivoire, to follow Nigeria and Ghana as having the largest shares of deal volume in the region.
East Africa on the other hand experienced the strongest growth in its share of deal volume compared to the corresponding period last year.
Kenya played a key role with early-stage venture deals in financials and consumer discretionary, mainly through online retailing contributing to the growth.
Kenya recorded a total of 54 deals compared to 10 and 6 for Uganda and Tanzania respectively.
Private capital exit activity also experienced notable growth. Fund managers achieved 22 full exits, which represents a 29 per cent increase compared to the corresponding period in 2021.
However, private capital fundraising in Africa slowed down reaching $0.7 billion (Sh84.5 billion) in final closes. This is a 20 per cent drop compared to the same period last year.
The decline mirrored the global trends, which mainly is the result of a challenging and competitive fundraising environment for fund managers.
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