Mergers and acquisitions (M&A) are becoming a survival strategy in the African tech ecosystem as more companies have shut down for various reasons this year.
The Nigerian tech ecosystem has seen a fair share of M&A activities. However, most of these transactions have their details shrouded in secrecy.
As the tech industry experiences unprecedented growth and disruption, startups are finding it crucial to adapt quickly to changing market dynamics. Mergers provide an avenue for companies to pool their strengths, whether it’s complementary technologies, diverse talent pools, or enhanced research and development capabilities.
By joining forces, startups are better positioned to tackle emerging challenges and capitalise on emerging opportunities.
DriveMe and Go!TwentySix
DriveMe, a mobile technology company in Nigeria, founded by Damilola Odunalde-Akeju, announced a 100 percent acquisition of Go!TwentySix, a provider of valet services in Nigeria. The acquisition was completed on January 1, 2023.
GBarena and Galactech
GBarena, an Egyptian e-sports platform founded in 2015 by Samer Wagdy and Mustafa Zaza, announced its acquisition of Galactech, a Tunisian gaming startup founded in 2016, on a share swap deal worth around $15 million.
This share swap, also known as stock-for-stock, gave GBarena the ownership rights to convert the shares in the target company (Galactech) as per a predefined swap ratio. This means GBarena bought Galactech with a portion of its stocks.
Andela and Qualified
Andela, the global tech network that cultivates IT talent in Africa and provides leading global technology companies with access to a high-skilled resource pool, acquired Qualified, the technical skills assessment for developers and software engineers.
Andela has acquired a 100 percent stake in Qualified at an undisclosed sum, adding about 3.6 million engineering talents to the company’s global community.
Blockfinex and Fluidcoins
Blockfinex, a Barbados and Seychelles-registered crypto exchange company, acquired a 100 percent stake in Fluidcoins, a Nigerian crypto payment gateway startup, for an undisclosed sum.
The founding team of Fluidcoins will continue to work on the product, making this an acquihire. However, this acquisition was driven by the company’s decision to venture into Wallet as a service business and crypto payment processing and scale it across the world.
Fin and ThuthuKani
Fin, a South African neo-bank owned by Timothy Nuy, announced its acquisition of Thuthukani, a Pretoria-based fintech startup founded by Mark Seymour. This acquisition continues its expansion into all relevant finance offerings for individuals and SMEs across its markets.
Thuthukani’s incremental housing finance offering was renamed Fin Home Loans and integrated into Fin’s South African portfolio with this acquisition.
FairMoney and Payforce
FairMoney, a Nigerian credit-led digital banking platform, completed the acquisition of PayForce, unveiled with the brand name ‘PayForce by FairMoney’. PayForce is Nigeria’s leading one-stop merchant payment and financial services distribution platform, helping small businesses receive payments while earning extra income.
Both startups declined to disclose the terms of the deal. However, the transaction was a cash-and-stock deal in the range of $15 million to $20 million. As part of the deal, CrowdForce CEO Oluwatomi Ayorinde joined FairMoney, where he heads the company’s payments business unit: PayForce by FairMoney.
BioNTech and InstaDeep
Early in January, German-based biotech company, BioNTech, acquired InstaDeep, a Tunisian London-headquartered artificial intelligence (AI) startup for $680 million. The transaction involves an upfront payment of cash and unspecified BioNTech shares worth £362 million, and a balance of £200 million payable based on InstaDeep’s future performance.
In 2022, the company, which manufactured Pfizer’s COVID-19 vaccine, participated in InstaDeep’s $100 million Series B round led by Alpha Intelligence Capital and CDIB.
With the acquihire, InstaDeep increased the company’s workforce to about 240, with teams in AI, ML, bioengineering, data science, and software development. BioNTech also said it will grow its network of global research collaborators in the field and expand its footprint in key talent hubs across the United States, Europe, Africa and the Middle East.
Turaco and MicroEnsure Ghana
Turaco, Africa’s tech-enabled affordable insurance company, in its mission to provide accessible insurance to one billion people, acquired MicroEnsure Ghana, a microinsurance company, from MIC Global.
The acquisition brought a wave of positive changes, with MicroEnsure rebranding as Turaco Ghana while retaining its experienced team and leadership, and will see Turaco’s presence across four African countries, including Kenya, Uganda, Nigeria, and now Ghana, increasing its active policies by 25 percent.
Autochek and AutoTager
Autochek, an African automotive technology company announced the acquisition of a majority stake in AutoTager, an Egyptian automotive technology company that makes it easier to find and buy cars.
This partnership aimed at deepening Autocheck’s presence in North Africa and supporting the company’s growth. The Egypt-based company founded in 2021 by Amr Rezk, CEO and founder, is a venture-backed startup enabling easier access to vetted vehicles and financing for consumers, connecting dealers with serious buyers and technology solutions to improve their operations.
BTrust and Qala
₿Trust, a non-profit organisation focused on decentralising Bitcoin software development, announced its acquisition of Qala, an organisation training African Bitcoin engineers to drive Bitcoin’s growth in Africa and the Global South while nurturing a generation of engineers committed to the open-source ethos of Bitcoin development.
The deal, which was completed on September 1, 2023, saw Qala rebrand as the ₿trust Builders Programme and build a critical mass of African engineers with a deep understanding of Bitcoin’s capabilities to transform the continent.
Risevest and Chaka
Risevest, a Nigerian investment platform, acquired Chaka, a Nigerian fintech company, in an undisclosed acquisition deal.
The acquisition deal was finalised on September 26, 2023. The founders, Tosin Osinbodu of Chaka and Eke Urum of Risevest, revealed that only Chaka’s cap table will be updated, while it continues to function as a separate company.
As both companies share a common investment niche, the acquisition of Chaka will aim to collaborate on both company’s infrastructures to improve their products.
Moniepoint Inc. and Kopo Kopo
Moniepoint, a Nigerian and African-focused fintech company, said it received approval from the Competition Authority of Kenya for 100 percent acquisition of Kenyan fintech company, Kopo Kopo.
The proposed transaction will see Moniepoint Inc. acquire all shares of Kopo Kopo, constituting a merger under Kenya’s Competition Act 2010. This law covers mergers where one business gains control over another in Kenya, achieved through share transactions or integration.
BitMama and Payday
Bitmama, a cryptocurrency exchange platform, is moving ahead with plans to acquire Payday, a virtual card service provider, by proposing a $1 acquisition fee and $1 million equity to all current investors of the beleaguered startup.
The news came barely nine months after Payday announced its $3 million seed round and three months after its exploration of sale options was confirmed.
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