From InstaDeep to Paystack: Here are the biggest startup exits in Africa and how much they raised

Startups around the world have faced challenges in exiting the market over the past few years, due to factors such as a frozen IPO market and reduced attractiveness to buyers. In addition, large mergers and acquisitions (M&A) deals have faced increased regulatory scrutiny, particularly those involving Big Tech or multibillion-dollar conglomerates.

Interestingly, the decline in venture investment in any startup ecosystem can often be linked to a lack of exit volume and value. In Africa, for example, M&A exits peaked at 44 in 2021, when the continent attracted almost $6 billion in venture capital. However, exits fell to 29 in 2022, as venture capital investment fell to over $3 billion.

Despite these challenges, local investors remain optimistic that M&A activity will eventually pick up as founders and investors seek liquidity in an increasingly difficult market.

“We will continue to see few (IPO) exits in 2024, given that many companies have scaled back growth to accommodate the reduction in capital availability. However, we will likely see more consolidation and M&A as undercapitalized companies look to capitalize on the value they have created on a larger platform,” TLcom Capital partner Andreata Muforo told TechCrunch last year.

However, the debate on whether the African tech ecosystem has lived up to expectations or underperformed in terms of exit performance (M&A and IPO) relative to venture capital investment: over $20 billion, continues. One perspective argues that the number of exits does not justify the capital infusion, while another emphasizes that even a few breakthrough exits are commendable given the relative youth of the ecosystem.

Expensya is one of Africa’s exit stories, showing the potential for significant gains even in a young and emerging tech ecosystem. After raising just over $20 million, the Tunis-Paris-based expense management startup was acquired by private equity firm Medius, resulting in a $10 million payout to its employees. The exit was valued at 1.5 times its last reported valuation of $83 million, according to PitchBook.

The acquisition is particularly significant in the context of the African tech ecosystem, where the terms of M&A deals are often shrouded in secrecy. The lack of transparency surrounding these deals makes it difficult to assess the true performance of the continent’s tech sector. However, when details are disclosed or uncovered, as in the case of Expensya, they provide valuable insights that help inform valuation and pricing strategies, allowing stakeholders to better align their expectations.

As we continue to monitor the development of Africa’s technology ecosystem, it is important to highlight and analyze the largest acquisitions that have been disclosed. These groundbreaking exits, often disclosed, offer a clearer understanding of the continent’s progress and its potential to deliver value through M&A activity.

InstaDeep

Founded by Karim Beguir and Zohra Slim in 2014, enterprise AI startup InstaDeep uses advanced machine learning techniques to bring AI to enterprise applications. The Tunis and Paris-based startup has raised more than $108 million from investors including BioNTech, Alpha Intelligence Capital, Endeavor Catalyst, and Google.

• Buyer: BioTechnology (2023)
• Exit: €500 million ($550 million) in cash and stock.

Send a wave

Drew Durbin and Lincoln Quirk founded Sendwave in 2014 to offer money transfer services from North America and Europe to emerging markets in Africa, Asia, andand America. Supported by YC Sendwave raised over $15 million from Founders Fund, Khosla Ventures, Serena Ventures, and Partech.

• Buyer: Zepz (2020)
• Exit: $500 million in cash and stock.

MainOne

MainOne is a data center and connectivity solutions provider serving customers from technology enterprises to cloud service providers across West Africa, with a focus on Nigeria, Ghana, and Côte d’Ivoire. Founded by Funke Opeke in 2010, the Lagos-based Equinix subsidiary raised more than $200 million in equity and debt prior to the acquisition.

IOD Group

Eran Feinstein founded payment gateway DPO Group in 2006. The Nairobi and Cape Town-based fintech provides payment services to thousands of merchants in multiple African countries. It has raised more than $15 million from Apis Partners and other investors.

• Buyer: International Network (2020)
• Exit: $291 million in cash and stock ($228.6 million in cash).

Payroll stack

Shola Akinlade and Ezra Olubi launched Lagos-based Paystack in 2015 as a payment processing platform for African merchants to accept online payments via debit card and direct bank transfer. The YC-backed startup — believed to be the first from the continent to graduate from an accelerator — has raised more than $12 million from Stripe, Visa, Tencent, and Ingressive Capital.

Buyer: The Stripe (2020)

Exit: Over $200 million in cash and stock.

Expensive

Expensya, founded by Karim Jouini and Jihed Othmani, provides intelligent payment card solutions to automate expense management for businesses across Europe. The Tunis-based software company has raised $25 million from Bpifrance, ISAI, and Silicon Badia.

• Buyer: Medium (2023)
• Exit: ~$120 million+ in cash and stock, per sources.

Fundamo

Cape Town-based Fundamo was a platform that provided mobile financial services, including person-to-person payments, airtime top-ups, bill payments and branchless banking services, to unbanked and underbanked customers. The fintech, founded by Hannes van Rensburg in 2000, raised $5 million from South African investors including Knife Capital.

Salary Space

Bruce, Clyde, Warren Clark and George Karageorgiades founded PaySpace in Johannesburg in 2007 as a cloud-based payroll and HR platform to streamline payroll processes and backup procedures. The bootstrapped startup first raised undisclosed funding last year from local payment solutions provider Netcash before its acquisition.

• Buyer: Gameplay (2024)
• Exit: ~$100 million+ in cash and stock.