Quick Summary: DEG has invested an additional $16.3 million in Mediterrania Capital IV, increasing its total commitment to €25 million. The fund focuses on mid-market companies in North and West Africa, targeting sectors like healthcare, logistics, and fintech. Recent investments include Morocco’s Laprophan and Cash Plus. This move highlights confidence in Africa’s private equity growth.
Strengthening Commitment to North and West Africa
In a strategic move highlighting confidence in North and West Africa’s economic potential, German development finance institution DEG (Deutsche Investitions- und Entwicklungsgesellschaft) has increased its investment in Mediterrania Capital IV (MC IV). The private equity fund, managed by Mediterrania Capital Partners (MCP), has secured an additional €15 million (approximately $16.3 million) from DEG. This latest investment raises DEG’s total commitment to MC IV to €25 million, underscoring its trust in the fund’s prospects.
Expanding Investment Portfolio
This new funding follows DEG’s initial investment in MC IV in May 2023. The capital infusion is aimed at strengthening the fund’s operational capabilities and expanding its portfolio across the targeted regions. Mediterrania Capital Partners focuses on growth investments within the Mediterranean and Sub-Saharan Africa, leveraging its expertise to drive mid-market development.
MC IV plans to invest in 8 to 10 companies, with individual investments ranging from €20 million to €50 million. The fund prioritizes acquiring minority stakes in established mid-sized businesses with high growth potential. Targeted sectors include healthcare, logistics, fast-moving consumer goods (FMCG), education, and financial services. Geographically, 75% of the fund’s capital is allocated to North Africa, while the remaining 25% is directed toward Sub-Saharan Africa.
Key Investments in Morocco
MC IV has already made notable investments in Morocco. In May 2023, the fund acquired a minority stake in Laprophan, a leading pharmaceutical company. Later, in October 2023, it invested in Cash Plus, a prominent fintech company offering diverse financial services. These acquisitions align with the fund’s strategy of supporting high-potential businesses in the region.
DEG’s Strategic Support
Beyond financial investment, DEG enhances its involvement through its subsidiary, DEG Impulse. This initiative provides strategic operational support to MC IV’s portfolio companies, helping them improve efficiency, sustainability practices, and overall impact. By combining capital investment with hands-on expertise, DEG aims to foster long-term, sustainable growth in African private equity.
Collaboration with Other Development Finance Institutions
DEG’s initial investment in MC IV was part of a broader €75 million fundraising effort to acquire Laprophan. This initiative also attracted funding from other major development finance institutions, including FMO (the Dutch entrepreneurial development bank) and Proparco (the private sector arm of the French Development Agency). The continued support from DEG and other DFIs reflects a growing recognition of Africa’s private equity potential and the essential role of financial institutions in driving economic development.
Future Outlook for Mediterrania Capital IV
For Mediterrania Capital Partners, the increased investment from DEG serves as a strong endorsement of its investment strategy. Under the leadership of Chairman Saâd Bendidi and Managing Partner Hatim Ben Ahmed, the firm is well-positioned to leverage the additional capital to further expand its portfolio and contribute to regional economic growth. As MC IV continues deploying funds and supporting its portfolio companies, its progress will be closely watched as an indicator of the strength and dynamism of Africa’s private equity landscape.
