Forbes - What’s next for Africa’s fintech boom?

More than $1.4 billion was invested into African fintech companies last year, up nearly sevenfold over 2020—amounting to more than half the continent’s $2.2 billion venture-capital funding total for 2021, per data from CB Insights. And this year, in the first quarter, African fintechs collected the third-highest quarterly funding total ever, as deal volume hit a new record. There were 69 fintech deals on the continent in Q1, 90% of them early-stage, compared to 41 in the same quarter last year.

Right now, the biggest sector focus in the region is mobile payments, Elif Yayla, a senior fintech analyst at CB Insights, tells me. “There has been a high uptick of mobile money transfers,” Yayla says about the cash-centric economy. “The way we do digital payments is through cards and digital wallets. In Africa, it feels like cards would be the next step, but no, it’s mobile payments."

With the rise in mobile-payment adoption, the growth of digital currencies looks poised to be the next fintech trend in Africa, which has low credit card penetration and a weak banking system.

Afriex cofounder and CEO Tope Alabi isn’t surprised it’s seeing such traction. In a region where local currency exchange can rates fluctuate widely, and where progress toward a standard currency for West Africa has been slow, Alabi believes stablecoin and other digital currency adoption could be transformational. He points to an uncle in Nigeria who he says loses as much as 10% of his monthly wages to currency volatility. “The solution to this problem is stablecoins,” Alabi says.

Implementing would-be solutions in Africa hasn’t been smooth sailing yet. But Haseeb Qureshi of Dragonfly Capital, one of Afriex’s backers, says that what got his firm interested in Afriex was its traction where so many other entrepreneurs had tried and failed. “It’s been fairly difficult for crypto founders to succeed in Africa, especially those trying from the U.S.,” Quershi says. “[Alabi] has one leg in the U.S., where he spent time, but has also spent a lot of time in Nigeria.” Afriex has seen its customer base grow by fivefold in the last six months, suggesting there’s a real appetite for crypto solutions on the continent. Maybe it just needs the right entrepreneurs to build them.
—B.S.

Last year, Witherspoon sold a stake in her Hello Sunshine studio to Candle Media, a Hollywood upstart backed by Blackstone, reportedly landing a $900 million valuation. Two months before Smith and his wife Jada Pinkett Smith stole the show at this year’s Academy Awards, the two sold a 10% stake in their Westbrook production company to Candle at a $600 million valuation, per Variety. Late last year, LeBron James sold a stake in his Springhill entertainment business to a group led by RedBird Capital Partners at a reported $725 million valuation. 

There’s a reason for this spate of deals: the streaming wars. Netflix, HBO Max, Amazon, Disney and all the rest are eager for content that will turn a profit—particularly after Netflix underwhelmed with its latest earnings report, sending jitters throughout the industry. It isn’t only star-driven studios: Buzzy names like A24 and Legendary Entertainment have also scored recent investments. There’s no end in sight to private equity’s ongoing push into Hollywood. —K.D. 

— TPG closed its TPG Rise Climate Fund with $7.3 billion in commitments, the largest vehicle dedicated to investing in climate-friendly companies ever raised by a private equity firm. The executive chair of the fund is former U.S. Treasury Secretary Hank Paulson. Earlier this year, the fund made an investment in Nextracker, which helps monitor and maximize the efficiency of solar farms, valuing the company at $3 billion.

— Robinhood saw revenue drop by 43% and active monthly users decline by 10% compared to one year ago, the stock-trading platform revealed on an earnings call Thursday, two days after announcing plans to lay off 9% of its workforce. The company previously raised a whopping $5.6 billion in private capital from notable venture firms including Ribbit Capital, Sequoia and NEA.

 — Julia Kahr is joining Cinven as a partner and its head of North America, leaving her prior role as a senior managing director at Blackstone, where she’d worked since 2004. For Cinven, which is based in London and invests primarily in Europe, the hire continues an ongoing push into the U.S. market.

— Bottled lemonade maker Lemon Perfect raised a $31 million Series A round at a $100 million valuation from Trousdale Ventures, Beechwood Capital and NNS Capital. The Atlanta-based company is also backed by Beyoncé, whose passion for lemonade is no secret. Recent Wall Street Journal reporting found that investments into celebrity-backed beverage companies are on the rise. 

— Thoma Bravo agreed to sell Kofax, a workflow automation specialist, to Clearlake Capital and TA Associates. No price was announced, but Bloomberg had reported late last year that Thoma Bravo was eyeing a $3 billion enterprise valuation in sale talks at the time. The firm bought Kofax in 2017 through a larger acquisition of Lexmark International’s enterprise software business, a deal reported at the time to be worth $1.5 billion.

— One-click checkout startup Bolt is being sued by one of its customers. Authentic Brands Group—which owns brands like Forever 21 and Nautica—has accused Bolt of failing to deliver on its technological capabilities in addition to a spotty rollout costing it $150 million in sales. Bolt says the claims hold no merit. The startup has raised $1.3 billion from Activant Capital, Tribe Capital and Human Capital. 

— Russian search-engine giant Yandex is selling its news aggregation and content recommendation platforms to VK, a major Russian social media company formerly known as Mail.ru Group. Earlier this week, Yandex announced a net loss of about $110 million for the first quarter, citing “geopolitical developments” as one reason for the disappointing results.

— Nairobi-based Sun King raised a $260 million Series D round for its solar energy products designed for people living off the grid in Africa and Asia. The round was led by General Atlantic’s climate-focused arm, BeyondNetZero. M&G Investments and Arch Emerging Markets Partners also participated. 

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