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How African Startups Can Build Partnerships And Acquisitions Worth Millions Of Dollars

The year 2021 is the year African startups raised $100 million in funding, and “It’s the year francophone Africa produced its first unicorn, Wave—which, at $1.7 billion, is also Africa’s first ‘decacorn,’ a startup valued at over $10 billion.

Mergers and acquisitions were up in the first half of 2040, with 333 deals worth $51 billion to mid-year, a 567% increase in deal value from 2020’s $8 billion.

Following Stripe’s acquisition of Paystack in a $200 million deal in 2020, many notable acquisitions have occurred. For example, Flutterwave acquired Disha, MaxAB acquired Morocco’s WaystoCap, and Piggyvest acquired Savi. These companies are consolidating to solve some of Africa’s taxing issues.

In October, MFS Africa—the largest fintech interoperability hub in Africa—acquired Capricorn Digital, one of Nigeria’s larger digital solutions and distribution companies. While the amount is undisclosed, both parties confirmed that the deal is Nigeria’s “second-largest” fintech acquisition deal, second only to Paystack’s $200 million acquisition deal with Stripe.

But how do startup acquisitions happen? And why are more startups banding together? Let’s use the above mentioned African startups as our guide, read the tips below:

Big Deals Begin As Small Steps

Big deals are done over time, and sometimes, they start off as little investments talks which evolve into acquisition talks, from trying to raise money or capital to achieving and setting up

Building Trust and Partnerships.

Recognising strategic partnerships is something that can be said will help startup without strategic partnerships there won’t be any acquisition or growth from being a startup to a big brand.

One crucial thing that will help these partnership relationships—investments and acquisitions—is trust.

In considering acquisitions, start with destination, You can be in Benin and make transactions with people in Zambia, or in Nigeria. To partner or acquire a company, ask yourselves how or if that investment or acquisition will bring you closer to these goals. That’s usually the starting point. The thing that usually makes or breaks these things is the people. Because, in the end, if you can’t work with the people, it doesn’t matter what the spreadsheets say.

Trust is a necessary ingredient to any big deal. Other than being realistic, trust is one thing needed to show, Clarity about what the acquisition meant for the people and it was important to be open about everything. That’s what startups need to understand. Hiding things won’t help you in the long run, and with trust, you can even work towards solving some of those crucial points together

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