Investing in Africa: 10 Success Stories that Defy the Risk Perception

By Sudi Am mba
03.04.2023

When it comes to investing, Africa is always perceived as high risks then the reality. There are a growing number of investors that are realising that the continent, home to 54 countries has some of the fastest growing economies in the world.

They have realised that there are high returns to be made from investing in African companies. Here are 10 examples of high return early investors made in African companies:

  • M-pesa (Kenya): the mobile payment platform was launched in Kenya in 2007. Early investors included Vodafone which invested $10 million. Today, M-Pesa has over 40 million users in Kenya and has expanded to others African countries. In 2020, M-pesa generated over $500 million in revenue for Safaricom.
  • Zipline (Rwanda): a drone delivery company in Rwanda raised $190 million in funding in 2021. The funding round valued the company at over $2 billion.
  • Celtel (Pan-African): early investors invested around $1.3 billion in this mobile telecommunication company now in several African countries. It was sold to Zain in 2005 for $3.4 billion.
  • Helios Towers Africa (Pan-African): a telecom tower operator in Africa, it went public on the London Stock Exchange in 2019. The IPO raised over $360 million and the funding round valued the company at over $1.8 billion.
  • Paystack (Nigeria): early investors raised around $10 million in funding. Stripe acquired Paystack for over $200 million.
  • Cellulant (Pan African): this Kenyan payment company operating across African countries raised $47.5 million in funding from a group of investors in 2018. The early investors who raised around $18 million got a significant return from Cellulant.
  • Flutterwave (Nigeria): in 2021, the company raised around $170 million in funding and was valued at over $1 billion. Another significant return for early investors.
  • Yoco: a South African fintech company that provides solutions to small businesses raised $83 million in funding in 2021. The funding round valued the company at over $300 million.
  • Andela: a Nigerian software development company raised $100 million in funding in 2019. It was led by Generation Investment Management and valued the company at over $700 million.
  • Branch (Kenya): this fintech company raised $170 million in funding in 2021. The funding round valued the company at over $1 billion.

There are many examples where early investors got significant return on investment, startups with high potential such as SafeBoda, SolarNow in Uganda, Maxcom in Tanzania, Zouzoucar or Afrikrea in Cote d’Ivoire. Others include Tizeti, Sendy, Migo, Jumia,Twiga Foods, Sokowatch, Mall of Africa, Iroko TV, Interswitch,…

As most African companies grow and become more valuable, the value of the investors equity stake also increases.

Early investors realize returns on their investment either through an Exit strategy with an IPO, Acquisition or Secondary markets which allow investors to buy and sell shares of private companies.