From M-Pesa to Iroko: Top Africa Investment Success Stories

By Sudi Am mba
10.04.2023

When it comes to investing in Africa, there is a lack of knowledge about success stories in this continent with 54 countries.

Most of investors underestimate the size and potential of African markets. They focus on challenges rather then untapped opportunities, decades of economic reforms, security, stability and political governance. They rely on outdated data, desktop studies and myths that has created this perception of a high risk destination.

Surely, there are rooms for improvement that why African governments engage with investors, entrepreneurs, other stakeholders to address strategic, operational issues of doing business in their countries.

Before we list few examples of early-stage investments with exceptional returns in Africa, let’s talk about the 3000% return on investment story.

Jason Njoku, a Nigerian born, CEO of Iroko TV (the Netflix of Africa) founded this video on demand company in Lagos Nigeria. This was his 10th startup attempts after failing many times.

In 2010, his friend and co-founder, Bastian Gotter invested $200.000 into IROKOtv. In 2011 Bastian managed to convince a couple of his old bosses to invest alongside with him. They put $80.000 for 10% stake of IROKO.

That was then a $800k valuation for a one year old company which generated $200,$1k and $6k in the previous 3 months.

After 5 years, the same investors sold their entire stake for $2.4 million in 2016. A 3.000% profit or x 30 ROI on their early investment.

In 2017, Gotter left the media company after raising over $30 million from VCs including Tiger Global, this exit afforded himto be a full time angel investor in startups such as Paystack, Flutterwave, PawaPay, Bamba… and co-runs Spark, an investment vehicle he launched with Njoku.

Other successful investments with exceptional returns in Africa include:

  • Jiji : in 2017, the Abraaj Group invested $10 million in Africa’s leading online classifieds platform Jiji. When Jiji was acquired by Digital Spring Ventures in 2021.The deal reportedly generated a return of over 300% for Abraaj.
  • Interswitch: in 2011, Helios Investment Partners invested in this Nigerian payment processing company. In 2019,Helios sold its stake for over $200 million, it was reported that the return was over 1000% on its initial investment.
  • Africa Logistics Properties (ALP): in 2016, CDC Group, the UK government owned development finance institution invested in ALP, a Kenyan logistics real estate developer. When ALP secured a $48 million funding round in 2020.The deal reportedly generated over 600% ROI for CDC
  • M-Pesa: in 2007, this mobile money platform was launched and expanded to other countries in Africa. Vodafone Group Plc which partnered with Safaricom to launch M-Pesa made a return of over 1000% on its investments in 2016

There are many other promising startups in different parts of Africa like Cote d’Ivoire with AfricInvest or the Democratic Republic of Congo with Wekebere, Linga, Mazawa, Kivu Green Energy…

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

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