Africa’s private capital hits $5 billion, fuelled by M&A rise

Africa’s private capital market staged a sharp rebound in the third quarter of 2025, driven by a wave of mergers and acquisitions and a growing preference for debt financing across key sectors, according to new data from market intelligence firm Stears.

The continent recorded 177 private market transactions valued at $5 billion, up 60 percent from $3 billion in the previous quarter. While the number underscores renewed investor confidence, analysts say much of the recovery was powered by a few large deals rather than broad-based expansion.

The standout transaction was French media group Canal+’s $2 billion acquisition of MultiChoice Group, a South African pay-TV giant. That single deal accounted for roughly 40 percent of total disclosed value, highlighting how consolidation is reshaping Africa’s investment landscape.

“The last quarter saw a steady flow of strategic mergers and acquisitions that continued to lift overall deal values,” Stears said in its Q3 2025 Private Capital in Africa report. “Activity remained particularly strong in Southern Africa, with additional momentum from Morocco and Nigeria.”

Excluding the Canal+ takeover, the report found a market marked by smaller, more strategic transactions, signaling maturity and selectivity among investors. Deals valued between $2.5 million and $10 million made up 32 percent of total activity, while the share of large and mega deals fell to 21 percent from 27 percent in the previous quarter.

Debt rises

Series A fundraising rounds gained ground, especially in digital and consumer technology, reflecting fresh investor appetite for early-stage growth. Technology emerged as the most active sector, accounting for 21 percent of all transactions, overtaking consumer goods and services for the first time.

One notable deal was Sanari Capital’s $23.4 million investment in Ctrack, a South African telematics company. Analysts say such mid-sized transactions illustrate how investors are pursuing targeted opportunities rather than broad, high-velocity capital deployments.

Beyond tech and venture capital, Stears noted a significant shift toward private debt, especially in capital-intensive industries such as agriculture, energy, and cold-chain logistics. The trend suggests these sectors are moving beyond the experimental phase and scaling proven business models that favor cheaper debt financing over equity.

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Southern Africa regained the top spot in deal distribution, accounting for 31 percent of transactions, followed by West Africa at 30 percent and East Africa at 28 percent. South Africa alone represented 87 percent of Southern Africa’s total deals, while Nigeria, Kenya, and Egypt led in their respective regions.

Stears also observed rising investor interest in Francophone West Africa, which contributed 22 percent of West Africa’s total activity. The shift reflects fund managers’ efforts to diversify portfolios and reduce exposure to single markets like Nigeria and Kenya.

Trade sales remained the most common exit route for investors, underscoring the role of strategic buyers in driving liquidity. Among notable examples were Phatisa’s sale of Deltamune to Vaxxinova, Verod Capital’s exit from TAG West Africa, and BII and Norfund’s divestment from Klinchenberg B.V. to Savannah Energy.

Meanwhile, project financing activity stayed strong in North Africa, led by the African Development Bank’s $58 million investment in STEG and a $490 million loan to the Egyptian Soda Ash Company.