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Africa’s biggest acquisition to date 💰

An AI Startup with a $684 million price tag 😮

January 14, 2023

Welcome to Tech Safari!

Your tour guide on African Tech 🧭

Today is Startup Saturday, where we dive into startup news and deal activity in the world's most exciting continent.

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So we're two weeks into 2023 and I'm already planning my next holiday in Africa.

Uganda and Tanzania are high up on my list - but if you have a recommendation I'm all ears.

Here's the tour plan for today 🧭

  • We'll head to Tunisia 🇹🇳 to dive into Africa’s biggest acquisition to date

  • Deal Roundup - A lot of action this week from Releaf, Jetstream and Catalyst Fund

  • Events and Opportunities

  • Tech Twitter

Alright, lets get this tour started 🦍

Africa’s biggest acquisition to date

It was a big week for African Tech. On Wednesday, Tunisian AI startup InstaDeep was acquired by BioNTech SE for $684 million USD.

That’s Africa’s biggest acquisition to date.

Let's get to know the people behind InstaDeep, the acquirers of BioNTech, and what this means for tech in Africa.

$2,000 and Two Laptops

InstaDeep was started by Karim Beguir and Zohra Slim - two Tunisian developers who wanted to build a deep tech company that could compete with the best in the world.

Back then, many investors in the AI space doubted that an African deep tech company could collaborate (or compete with) Google.

But Karim and Zohra kicked off with ‘two laptops, $2,000 and a lot of enthusiasm,’ bootstrapping the company for four years.

Today, they use machine learning to help enterprise companies with decision-making.

That’s vague, I know, so here are a few examples of who they work with and what they do:

It’s a big range. But perhaps their biggest breakthrough was their collaboration with their acquirer, BioNTech.

Biotech x AI?

BioNTech is a German biotech company (surprise surprise) and the company behind Pfizer’s COVID Vaccine.

In 2019 they partnered with InstaDeep to create an early warning system to detect COVID variants.

And it was a huge success - together they built a system that can detect 90% of COVID variants two months ahead of the World Health Organisation.

That means BioNTech can develop and deploy COVID vaccines faster.

BioNTech rubbed their palms, realising that they could integrate AI into drug discovery to treat other illnesses - like cancer and infectious diseases.

And while announcing the $684m acquisition on Wednesday, they stated their intention to embed machine learning into all of the company’s processes in drug discovery.

InstaDeep takes the cake for one of the biggest acquisitions in AI to date - and the biggest acquisition in Africa.

The African Acquisition Playbook 📖

InstaDeep joins a short list of Africa’s startup acquisitions in the last five years.

Also on the list is:

  • Paystack, acquired by Stripe for $200m in 2020

  • Sendwave, acquired by WorldRemit for $500m in 2020

  • DPO Group, acquired by Network International for $288m in 2020

But InstaDeep’s acquisition is different to other African acquisitions.

We see a similar story play out with acquisitions in Africa. It’s a three-step formula:

  • Step 1) Repeat a business model from the West and contextualise it for African countries.

  • Step 2) Execute and grow beautifully.

  • Step 3) Sell to a global leader in the space.

Stripe wanted to expand to Africa - so they picked up one of Africa’s most promising payment companies, Paystack.

WorldRemit sees remittances booming between Africa and the rest of the world, so they buy one of the fastest-growing remittance startups, Sendwave.

InstaDeep’s acquisition is different.

Instead of replicating a business model, they pioneered breakthroughs in deep tech with their expertise in AI and Machine Learning.

They didn’t replicate Google or Deepmind for Africa.

They brought innovation in AI to the table - and Google, BioNTech and Deutsche Bahn became users of their technology

It’s rare that we see innovation starting in Africa - then expanding to the rest of the world.

Karim, CEO of InstaDeep wanted to prove that African talent can be competitive and make a difference in deep tech. He's made his point.

This is the first for deep tech in Africa, and it's just the beginning!

What do you think of InstaDeep's historic acquisition? Let me know here.

Deal Roundup

Startup raises

  • Releaf - a Nigerian raw materials processing startup - raised a $3.3M pre-Series A round led by Samurai Incubate Africa with participation from Consonance Investment Managers.

  • Jetstream Africa - a Ghanaian e-logistics platform for exporters and importers in Africa - has raised $13M in a combination of debt and equity financing. It’s a big lineup of investors, including Proparco, Octerra and Wuri Ventures.

  • Ahura AI - an AI startup operating in Africa using AI to improve learning habits - raised a $5.6M seed round from investors including CP Ventures.

  • Catalyst Fund made a $2M investment into 10 African startups that accelerate resilience for climate change. These companies are:

    • Eight Medical

    • Farmz2U

    • PaddyCover

    • Farm to Feed

    • Octavia Carbon

    • Bekia

    • VAIS

    • Agro Supply

    • Assuraf

    • Sand to Green

Events + Opportunities

Startup Twitter

Our favourite tweets on African tech this week

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Catch you soon!

👋🏾 Caleb