Since the beginning of this year, we’re seeing about one-quarter of fundraising discussions now involve M&A in some form. These discussions often involve large, well-capitalised private companies looking to merge with smaller players. Occasionally it is also the big multinationals looking to expand their African footprint. We see consolidation activity in 4 main sectors:


2021 was a record-breaking year for deal-making in fintech. Companies raised $3 billion across the continent compared to $1.35 billion in 2020. Payments and transfers, particularly remittance and micro-business service fintech providers, are scaling up and maturing. Many (primarily from West Africa) are rapidly expanding across the continent, looking to reach new customers and offer new services.

It seems as though many are also realising the premium value of becoming a pan African fintech in terms of raising large rounds and eventually exiting.

Late last year, Chipper Cash, a peer-to-peer cross-border payments fintech, closed a $150 million Series C extended funding round at an over $2 billion valuation. The round was led by crypto exchange FTX, with participation by SVB Capital, Deciens Capital, Ribbit Capital, and Bezos Expeditions. Chipper Cash will integrate with FTX to enable African users to fund their crypto wallets through Chipper Cash, providing a compelling way for both companies to scale as crypto adoption continues to grow across Africa.

DAI Magister recently advised Baxi, one of Nigeria’s largest independent SME-focused electronic payment networks, on its acquisition by MFS Africa. The purchase provides MFS Africa an entry into the Nigerian market, but it also opens the company to a sophisticated agent network not available in other African markets.

Until last year international fintech companies seeking a foothold in Africa were primarily responsible for driving M&A activity. Stripe acquired Nigeria’s Paystack, an easy-to-integrate online payment gateway, for $200M+ to expand into Africa. DPO Group, Africa’s largest and fastest-growing payment service provider, finalised an acquisition with Network International, a leading enabler of digital commerce across the Middle East and Africa (MEA) region. Visa also acquired a minority equity stake in Nigerian digital payments firm Interswitch, making the company one of the most valuable African fintechs with a valuation of $1 billion.

This is now changing and in the next couple of years, we expect to see increased deals between African companies as well-funded and maturing African fintechs continue to expand through M&A, driven by the high cost of market entry, rising customer acquisition costs, and the challenging patchwork regulatory environment across the continent. We may also see incumbent financial institutions look to partner with or acquire fintechs to offer their customers innovative new services and for fintechs to access the established distribution channels of these incumbents.

Flutterwave, a Nigerian-based payment infrastructure provider for merchants and PSPs, recently closed a $250 million Series D funding round in February, pushing its valuation to over $3 billion. According to the company, the new funds will accelerate customer acquisition in existing markets, drive growth through M&A, and speed up the development of complementary products and Jumo, which raised significant funding in late 2021 and is looking to grow across the region.

This is all good news for the African consumers and businesses as scale ultimately means more efficient organisations and lower transaction and borrowing costs in the medium term, which are important hurdles on the path to economic growth on the continent.


Africa’s e-commerce space is booming and maturing. Consequently, we’ve started to see consolidation between potential competitors as companies seek to scale and move into new markets.

In February, Nigerian-based online marketplace Jiji announced the acquisition of its main competitor in Ghana, Tonaton, in what is a major market consolidation in the online marketplace space. The acquisition will provide Jiji’s users’ access to a more extensive network of buyers and sellers, significantly increasing trading opportunities and the aggregate user base. The purchase of Tonaton follows Jiji’s acquisition of car marketplace Car45 in mid last year to grow its vehicles category.

Another notable deal saw Nigeria-based TradeDepot acquire Green Lion, one of Ghana’s largest and fastest-growing B2B e-commerce platforms. TradeDepot’s B2B marketplace connects micro-retailers with distributors and manufacturers of fast-moving consumer goods (FMCGs). The acquisition will enable the company to leverage Green Lion’s established data, technology, and logistics network to connect more retailers to suppliers. It will also provide access to financing options like loans or BNPL embedded in the company’s ShopTopUp platform.

We’re seeing these types of deals go through because succeeding in this sector is a game of scale. Tech-enabled distributors of FMCG and industrial goods must achieve enough scale to become more relevant to the product providers, often global giants (Nestle, etc.). Scaling underlying logistics platforms is also critical as the margin potential increases significantly as these companies achieve several times their current size.

That said, these deals are likely just the tip of the iceberg. There is a whole range of e-commerce companies looking to scale across Africa. Kenya-based digital B2B grocery buying platform Marketforce recently raised $40m in Series A funding to expand its service across East Africa and Nigeria and offer ​​retailers buy-now-pay-later (BNPL) trade credit. Sokowatch, a direct competitor of Marketforce in Kenya, and companies like Twiga Foods are also looking to expand in the East African market.

It will be interesting to see how these and others approach expansion. From our point of view, companies are likely to continue turning to M&A in the coming years to expand and scale at speed in an industry where each local market is difficult to crack, while exchanging best practices and leveraging technologies can create a lot of value on both sides of the deals

Renewable energies

Renewable energies in Africa have grown rapidly over the past two decades. This growth occurred first through traditional independent power producers (mainly wind, solar and hydro) connected to the grid – Lekela, Platinum Power or Scatec Solar have been some of the very active IPPs on the continent. More recently, growth has been propelled through off-grid solar companies selling solar home systems on a pay-as-you-go basis or operating ground or roof-mounted mini-grids for residential and/or C&I use. While we don’t anticipate too much consolidation among traditional IPPs who typically grow organically as most value creation stems from their project development activity, we expect some consolidation within the off-grid solar space.

Since COVID and the ensuing supply chain disruption, off-grid solar companies have come under some margin pressure as they have been unable to pass along 100% of the recent increase in their bill of materials to their customers in a market where affordability remains a critical factor. Access to capital (equity and debt) has become more difficult for less mature players as investors have become more cautious following a few industry setbacks. For instance, Fenix International and Mobisol had to fall under the umbrella of Engie as they were no longer able to operate independently.

Economies of scale are the name of the game in this sector, where it’s all about affordability and access to competitive financing, ideally in local currency. Larger companies that can show solid financials and unit economics over a long period benefit from a lower cost of financing and a lower bill of materials. They will have a significant competitive advantage compared to smaller market players.

There is also value to being geographically diversified to mitigate currency, political and regulatory risk as the situations in the various African economies are mostly decorrelated. In an industry where companies need to develop strong expertise in last-mile distribution, credit quality monitoring, or after-sale service, exchanging best practices is also another good reason to consider growing inorganically.

This anticipated consolidation trend may not be limited to solar home system companies. The C&I solar space is highly fragmented, with more than a hundred companies in Nigeria and Kenya alone. The larger industry players like Starsight or Daystar Power are well-positioned to consolidate this industry segment to grow their customer base, lower their cost of capital, and create large-scale pan-African C&I platforms. This will make them more attractive to the larger European utilities and oil & gas companies who have been eyeing opportunities in that space.

Despite relatively muted M&A deal activity compared to the fintech and e-commerce sectors, rising costs and competitive pressures mean we’re likely to see increased consolidation in the coming year and beyond in the renewables space.


The African telecom sector recorded huge revenues in 2021, exceeding $45bn in Sub-Saharan Africa. MTN, Vodacom, Airtel, and one or two other big market-specific players such as Safaricom dominate the industry and have been the main drivers of M&A deal-making in recent years.

In late 2021, IHS Holding, one of the largest owners and operators of shared telecommunications infrastructure globally, acquired over 5,500 telecommunication towers in South Africa from MTN, a leading mobile telecommunications operator in the country. Airtel announced several sale and leaseback transactions throughout the continent to Helios Towers and others to reduce its debt position and move to an asset-light business model.

Since the acquisition of Eaton Towers by American Tower in 2019, we have seen a continued concentration of this segment to the three primary players, IHS, ATC, and Helios, with one or two others such as SBA in select markets only. While challenger providers have emerged in some markets, the need for multi-tenant sites to be profitable and the capital intensity of the business have made it difficult for others to gain meaningful traction. As a result, transactions in the tower space are likely to continue to be driven by the major operators.

However, we do expect to see increased consolidation in some parts of the Telecom sector for several reasons. On the infrastructure side, we have witnessed prominent international players in the data centre space entering the market in quick succession (Equinix and Digital Realty, both acquiring assets on the continent in the past few months). With a lack of real scale assets across the continent, there is now arguably too much capital chasing too few scale assets as the majority of investors look for operations that have the potential to attract the hyper-scalers. Smaller operators will be unable to scale enough on their own. Given long lead times to build, larger operators will be looking for faster ways to expand their footprint and offer additional redundancy to their more prominent clients.

On the operator side, there are very few markets on the continent where operators outside the top two or three make any money. This is why we’ve seen operators like Africell recently ceasing operations in Uganda and the majority of nationally owned Ugandan operators across the continent, such as UTL in Uganda, facing dwindling market shares. It’s also why country-specific independent operators outside a top-2 market position, such as 9Mobile Nigeria are in a constant cycle of refinancing to stay afloat. There are also many smaller operators, traditional 2G/3G/4G and fixed wireless ISPs (a particularly fragmented space), some of which have spectrum assets that have acquisition value. Others are sub-scale in over-crowded markets with a difficult path to reach the critical mass needed to achieve meaningful profitability.

On the fibre side, entry into new markets is challenging with long lead times as regulatory permissions and Right of Way challenges remain prolific. There is room for two or three regional leaders to emerge (Liquid Telecom is one example). A few sub-sea cable operators, such as Seacom, have also looked to acquire in-land assets. Still, there is an opening for one or two others to establish themselves with the right capital support. Many will likely conclude that the acquisition of local operators may be the most efficient way to build a regional footprint.

What’s next for M&A?

As Africa’s economy continues to recover from the pandemic, there are positive indications to suggest a robust M&A market is on its way. Economic sentiment is healthy, capital is flowing in, and companies are maturing and looking to expand. In the coming years, macro-environmental changes (AfCFTA) will also allow for the potential reorganisation of the value chain across borders and present new opportunities.

Beyond deals involving large private companies and big multinationals, we’re likely to see the continued rise of locally led M&As as a growing number of African entrepreneurs are launching fast-growing companies and looking for ways to scale.

We’re excited to see what this year will bring. As always, we’ll be there on the frontlines facilitating deals and monitoring new developments as these sectors continue to transform.

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