Bboxx, a London-headquartered cleantech startup that provides clean energy in Africa, quietly acquired PEG Africa, another cleantech startup based in Accra, in a deal worth $200 million, according to two insiders close to the story.
This deal is the largest across all categories—including venture funding, grant, or M&A—in the African cleantech startup ecosystem. Such a large injection signals the maturity of the sector and sets the stage for more capital injection into it.
Though signed paperwork exists, the acquisition is still subject to customary closing conditions, including an agreement with lenders. Where arrangements are concerned, institutional lenders like Nairobi- and London-based Sunfunder and Swiss ResponsAbility, which both finance PEG’s operations, will need to take their time to move entities (aka debt) from PEG to Bboxx. These moving parts may take another 3 weeks to go into effect, according to the source.
According to one source, Bboxx’s overarching ambition is to become one of the biggest next-generation utility companies in the world. Since Africa is a significant focal point—followed by Asia, which it has expanded into—Bboxx is ready to consolidate its position by merging with or acquiring existing energy startups.
Bboxx was founded in 2010 by Mansoor Hamayun, Christopher Baker-Brian, and Laurent Van Houcke to bring electricity into homes across Africa through an affordable pay-as-you-go renewable energy supply. The company has since added clean water and clean cooking to its line of offerings. According to our source, Bboxx has helped more than 5 million people access clean energy.
Tracing back the company’s traction since inception, to have served more than 5 million people couldn’t be a tall order. The company is present in 7 African countries—Burkina Faso, Nigeria, Rwanda, DR Congo, Togo, Guinea, and Kenya. Bboxx has won grants, secured loans from local and international banks, and raised tens of millions in venture funding. It’s also in partnership with several private companies and governments, including DR Congo, which just renewed its partnership last month.
Bboox became the first company to introduce a government solar energy payment subsidy in Africa when it forged a partnership with the Togolese government in 2019.
In 2019, the company raised $50 million in series D from Mitsubishi Corporation and Engie Rassembleurs d’Energies, two leading global energy companies. After the funding announcement, there were questions about what would happen with this relationship and how Bboxx would deal with the interests of its investors. Bboxx’s position was that it would use the money to fuel its global expansion but many questions were raised about its investors’ game plan: Would the Japanese Mitsubishi push to acquire the startup’s burgeoning Asian operation? Would Engie, which already owns 2 of Bboxx’s African competitors Mobisol and Fenix, acquire Bboxx too to become the undisputed market leader on the continent? Even though these questions haven’t been answered yet, this new development shows that Bboxx is bullish on its expansion and growth.
PEG Africa was founded in 2013 by Hugh Whalan and Nate Heller to do the same thing Bboxx set out to do—provide a pay-as-you-go alternative to electricity to over 700 million Africans without access to electricity. The business kickstarted in Ghana and expanded into Mali, Senegal, and Ivory Coast. It has collectively served more than 2 million people and raised $65 million in funding.
Even though PEG Africa’s founders are Australians, a significant chunk of their entrepreneurial career is rooted in Africa, especially Whalan the CEO, who’s already co-founded and exited two startups. PEG Africa is now Whalan’s third acquired company.
One of the most strategic points of this deal is that the 2 companies, Bboox and PEG aren’t currently operating in the same market. So it’s a perfect way for Bboxx to enter these markets. According to our sources, it’s likely that PEG will keep its brand name and talents, and will continue operating independently for now.
Though we’re yet to receive full details about this deal yet, the acquisition is a move to fuel growth and expansion ahead of a planned IPO by Bboxx, according to our source.
TechCabal reached out to Bboxx to confirm the news of the acquisition and received a response from the company’s public relations agency, which stated that Bboxx does not comment on market rumours—a response that hints that Bboxx is waiting for the ink to dry before any formal announcements will be made.
As the Africa startup ecosystem continues to mature and attracts more funding, it will continue to record more acquisitions and exits. But unlike Stripe’s acquisition of Paystack and Equinix’s acquisition of MainOne, which were foreign-local acquisitions, this deal remains one of the most significant intra-African acquisitions. The closest to this is MFS Africa’s acquisition of Capricorn Digital, which wasn’t disclosed but was said to be second to only Paystack’s deal.
