Urbanization, consumerism pushing private equity investment in Africa: analysts

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NAIROBI, Dec. 3 (Xinhua) -- Rapid urbanization, a growing middle-class and increased consumerism are among things that are making private equity firms raise their investment in Africa, analysts said on Monday.

Cytonn, an investment firm, said the investment has been on the rise for the better part of this year as more investors putting money in financial technology, education, financial services and health sectors, among others.

According to Africa Private Equity and Venture Capital Association (AVCA), in the first quarter of 2018, private equity deals across Africa totaled 1 billion U.S. dollars. Between 2010 and 2017, private equity funders have invested in Africa some 25.6 billion dollars.

"There is also an attractive valuation in the sub-Saharan Africa's private markets compared to the public markets and even the global markets. There has also been a better economic projection in the sub-Saharan Africa compared to global markets," said Cytonn.

In Kenya, Catalyst Principal Partners, a private equity firm, last month raised 15.8 billion Kenyan shillings (155 million U.S. dollars) from pension funds and international investors in its second round of funding.

Similarly, in South Africa, private equity firm Ethos announced last month 49 million dollars investment into Channel VAS, a FinTech provider that specializes in data analytics and mobile financial services, according to Cytonn.

"We remain bullish on private equity as an asset class in sub-Saharan Africa. Going forward, the increasing investor interest and stable macro-economic environment will continue to boost deal flows into African markets," said the firm. Enditem

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