Diving into the deep end
Private tech equity research in Africa is too hard to not do it.
I’m sorry, but if African unicorns are revalued in today’s markets, your favourite unicorn map (and bragging rights) would disappear to be replaced with a radically different map with barely a handful of previously hyped names on.
Today, companies like [name redacted], which can boast of annual revenues between US$ 65mn and US$80mn, are struggling to find buyers willing to value them at half a billion. Some 40+ months ago, companies with less revenue were being priced and dressed up in unicorn valuations.
None of that would fly today.
We were lucky in 2021 and again in 2022, and that was it. So it is really not a license to boast about the continent’s alleged unicorn count. Or even make intercontinental comparisons, not because the comparisons are wrong. But because they are the wrong thing to focus on.
What should the focus be?
Exit liquidity for early backers, repriced growth-stage financing at market-sesible valuations, and building a pipeline of market-ready, high-conviction bets.
The implication is that everyone has to roll up their sleeves and dig in deep to find and create value as an ecosystem with clear commercial objectives. It’s a call for transnational private equity investment bankers, broker-dealers, rookies, seasoned corporate sailing hands, and independents to sanity-check the ecosystem with cut-the-fat sell-side-type research (all legal caveats apply).
The more I learn, the more I am frustrated by the posturing and grandstanding that lack substance. And as I told a friend this evening, I imagine that the lack of clarity is a barrier to serious commercial money from taking us seriously.
I am a fan of well-written and concise high-value information.
So naturally, I am diving into the deep end to push something I’ve held in for a long while.
And starting a Cut-The-Fat Sell-side-type research on private tech equity in emerging markets, with a broad focus on fintech and commerce. It will only be available to properly accredited investors, corporates and other curated recipients.
That said, my notes on Money Myths and digital Africa will be published more regularly here and elsewhere.
What to expect?
A detailed dive into embedded payments at two selected companies (one African and one Asian), at comparable stages, covering unit economics walk-throughs, operating KPIs, and value ranges, amongst others.
Want to support/join the distribution list?
Email abraham@apercu.pro