Verdant Capital has completed four private equity transactions in South Africa including significant fundraisings for Bridge Taxi Finance and Retail Capital, the sale of Nedan Oil, and the sale of Baxi to MFS Africa.
A small group of leading international impact investors enabled Verdant Capital raise ZAR 300 million (approximately USD 20 million) in debt financing for Bridge Taxi Finance.
The funding will go toward expanding the institution’s lease portfolio. Verdant Capital has also raised ZAR 150 million (about USD 10 million) in debt funding for Retail Capital, a leading technology-enabled SME financer.
The first tranche of ZAR 50 million was drawn in October, with the remainder due in 2022.
Bridge Taxi Finance, based in South Africa, offers low-cost credit to South African minibus taxi drivers.
Impact vehicle funding, day-to-day tracking, advising and management, and vehicle maintenance and services are all part of its vertically integrated business strategy.
To date, the business has provided funding to over 3,200 entrepreneurs (1,100 in FY2021 alone). Bridge Taxi funds financially disadvantaged people and gives them the opportunity to own income-generating assets, allowing them to make a meaningful contribution to the economy.
The deal marks Bridge Taxi’s first entry into overseas markets, and it is a defining moment for South Africa’s inclusive financing sector. Bridge Taxi is majority-owned by the founders, with domestic private equity holding a minority stake.
In the South African SME market, Retail Capital is the first and largest Merchant Cash Advance supplier.
Since its inception ten years ago, the company has distributed more than ZAR 4.5 billion to more than 38 000 merchants.
By 2023, it plans to distribute ZAR 8 billion to small enterprises. Retail Capital continues to form strategic alliances with fintech companies in order to accelerate SMEs’ financial inclusion.
Retail Capital has been backed by investors from some of Africa’s most well-known private equity firms, including APIS, Crossfin, and Future Growth.
The successful raise is the third transaction for which Verdant Capital has acted as sole international arranger and advisor for Retail Capital.
Verdant Capital’s position as the leading advisor to Inclusive Financial Institutions in Africa is strengthened by this transaction and the capital offering for Bridge Taxi Finance.
Verdant Capital advised a leading super-agent in Nigeria to MFS Africa, a leading South African-headquartered pan-African payments business and a portfolio company of Lun Partners, Goodwell, and Equator Capital, in a landmark cross-border transaction, contributing to innovation and disruption in the financial services sector.
Finally, Verdant Capital supported Philafrica in the sale of its holdings in soya oil crushing. Philafrica, an AFGRI subsidiary, has sold its soya oil crushing plant, which goes by the names Nedan, Marathon, Soya Ya Ka, and Promax on the market (soya oil cake).
Helios Fairfax Partners, a renowned pan-African alternative investment manager, and the Public Investment Corporation of South Africa jointly control AFGRI.
The sale of the soya oil business is driven in part by AFGRI’s overarching goal to focus on its core business, which is to provide premier agricultural services to South African farmers in order to ensure food security in the country.
The acquiror is majority BBBEE-owned party, and the transaction marks an important contribution to the transformation of foods sector in South Africa.
Verdant Capital expects an increase in transactions in the agri-business and food sector over the next 24 months, driven by fundamental demand drivers as well the number of private equity investments from the last decade which are now reaching maturity.
Verdant Capital’s successful mandate is the business’s fourth successful transaction in the sector in the previous 18 months, and the firm is presently working on more.
Verdant Capital’s status as a leading advisor to Africa’s private equity market has been strengthened by the completed transactions.