New alliance, old foes

South Africa’s new coalition, Breega’s $75m Africa VC fund, $141m for data centers, and where to invest $500 right now.

Author

Anthony Miclet
June 20, 2024

Good day, and welcome to Daba’s weekly newsletter!

Africa will remain the second fastest-growing region by GDP this year after Asia, the latest AfDB African Economic Outlook says, indicating a positive outlook despite structural challenges and severe shocks the continent continues to face.

In other top stories for today:

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Markets Wrap

Markets

Earnings

Dividends

A Message From Daba

Where Should You Invest $500 Right Now?

When research analysts catering to some of the largest brokerage firms in francophone West Africa have a stock tip, it can pay to listen. 

And every week, they reveal what they believe are the 10 best stocks on the BRVM for investors to buy right now…

We’ve Just Launched Our New WhatsApp Channel for Real-Time Insights!

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And Catch Our Highlights From GITEX Africa 2024!

Catch exciting snapshots from GITEX Africa 2024 in Morocco, where our co-founders Boum III Jr and Anthony Miclet showcased Daba’s cutting-edge solutions.

Check out the highlights below and stay tuned for more updates on our journey towards shaping the future of investing in Africa.

Daba Co-founders Boum III Jr and Anthony Miclet at GITEX Africa 2024 in Morocco.

The Week’s Top Stories

Upbeat markets

Stock markets all green as crypto prices continue to plummet

Despite gains by large-cap stocks like Orange CI and Sonatel, the BRVM major index fell for the second consecutive session on declines in Nestle and NSIA Banque, but stayed positive on a week-on-week basis.

The price of Bitcoin scraped below $65k on Wednesday, trading at $64.9k with no signs of recovery in sight. This continues to dampen investors' confidence amid a bearish sentiment in the general crypto market.

Gold price refreshes weekly high early Thursday amid September Fed rate-cut bets, geopolitical risks, and political uncertainty in Europe. After hitting a seven-week high earlier, oil prices pared some gains as geopolitical issues reclaimed focus in the second half of Wednesday.

Breega close

Anglo-French VC firm hits first close of $75m fund for African startups

Breega has reached the first close of a $75m fund targeting early-stage startups across Africa. Named "Breega Africa Seed I," the fund will invest in key markets like Nigeria, Egypt, and South Africa. 

Led by entrepreneurs Melvyn Lubega and Tosin Faniro-Dada, the fund aims to capitalize on Africa's booming tech ecosystem, which saw $6bn in VC funding last year and a rise in unicorns. 

Breega has already invested in startups like Numida and Klasha, with initial investments ranging from $100,000 to $2 million.

Ramaphosa stays

South Africa’s leader sworn in for another term after ANC-DA alliance

Cyril Ramaphosa has secured a new term as South Africa's president, leading a coalition government formed with the opposing Democratic Alliance and smaller parties after intense negotiations just before re-election.

The African National Congress (ANC), which Ramaphosa heads, lost its parliamentary majority in last month's national vote, forcing it to rely on rivals to remain in power. They must now agree on cabinet positions and policy stances.

For now, investors are relieved. The nation's currency and debt rallied on the news that the ANC chose more market-friendly partners over radical parties. But keeping this diverse coalition intact while steering the recovery of Africa’s largest economy may prove challenging.

Headline Roundup

A summary of the major business, tech, and finance headlines of the past week.

Economy & Macro

M&A and Corporate Deals

Startups and VC

Fundraising and Accelerators

Opportunities Corner

Discover funding, awards, and accelerator opportunities to boost your startup's growth. Deadline in brackets.

Insight for the week

Get more context into events shaping Africa’s economic landscape.

Tapping Africa’s low-income video streaming market: Africa is considered the next big market for video streaming services like Netflix, Amazon Prime Video, and Disney+ due to the confluence of a young, mobile-first population and increasing internet connectivity.

Available data backs the viability of the market.

Digital TV Research projects subscriptions of video-on-demand in Africa to reach 15m by 2026, from 5m in 2021.

Industry revenues are poised to triple from $623m to $2bn over the same period.

But there’s a major roadblock—most Africans live on very little income. 

Around 85% of people in sub-Saharan Africa live on less than $5.50 per day, which differs greatly from consumers in richer countries. 

Costly internet also stops people from streaming.

Africans have to pay between $50 and even $70 for a month of decent internet. 

Shelling out an additional $10-$50 for streaming subscriptions is thus difficult for most.

So streaming platforms need to change their usual strategies to fit the lower income levels of African viewers.

But a fast-growing local player has been ahead of the curve for the past year and a half, we write in our latest Pulse54 newsletter.

Amid competition from big players, Wi-flix is making its mark with affordable pricing, telco data bundling, and a focus on local content.

These methods saw it gain over 1m paid subscriptions by over 300,000 customers within just a year of launching.

Currently, Wi-flix has:

  • 1.2m+ customers and a rapidly growing user base

  • $28m+ projected 2026 EBITDA

  • Powerful distribution through Amazon and Foxxum deals

  • Visionary founders backed by elite investors

  • Preeminent gateway to 1bn+ African entertainment consumers

And the best part? You can be part of the ongoing streaming revolution in Africa as an investor in Wi-flix through Daba.

To capitalize on this opportunity, TAP HERE TO CONNECT with our team to discuss further and possibly secure an allocation before availability lapses.

Or download the Daba app to access the offer and many more options directly.

That’s it for this week. Next Frontier is sent once weekly. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.

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Catch you next week!