Wananchi Raises New Growth Capital

Kenya’s first triple-play provider raises US$57.5m of new growth capital

Wananchi Group Holdings, East Africa’s leading provider of PayTv, broadband internet and VoIP services, today announced that it has raised US$57.5million in growth capital from a group of international investors.

Wananchi presently services the retail and corporate markets in East Africa through its consumer and corporate divisions. Wananchi’s consumer division operates under the ‘Zuku’ brand and provides Kenya’s only ‘triple-play’ bundle including 100 channels PayTV, broadband Internet (with speeds from 1MB to 20MB) on the Docsis 3.0 platform, and VoIP phone services. Wananchi’s corporate division, which operates under the ‘SimbaNET’ brand, is a leading provider of VSAT and data solutions to corporations in greater East Africa.

The capital raised in the financing will be used to continue the deployment of the company’s fiber infrastructure over which it presently offers its triple-play service bundles to retail consumers in Kenya. In addition, the capital will be used to support the launch of Wananchi’s direct-to-home (DTH) satellite PayTV offering in the greater East Africa region to 10 countries; Kenya, Uganda, Tanzania, Ethiopia, Eritrea, South Sudan, Rwanda, Burundi, Malawi and Somalia.

New investors in the financing round include Liberty Global Inc., one of the world’s largest cable companies, Oppenheimer Funds, and Sarona Asset Management, a Canadian-based emerging markets fund manager seeking impact investments. Existing Wananchi investors following on in the round include East Africa Capital Partners (EACP), a leading East African private equity firm focusing on telecoms, media and technology sectors, and Emerging Capital Partners (ECP), a leading Pan-African private equity firm with $1.8 billion in capital under management.

Commenting on the announcement, Richard Bell, Wananchi’s CEO, said: “Our vision is to become the leading PayTV, broadband internet and VoIP services provider in East Africa. We welcome the support of new investors Liberty Global and Sarona as well as continued support from our existing shareholders, EACP and Emerging Capital Partners and look forward to working together to achieve our collective goal.”

Commenting on the investment, Mark Schneider, EACP’s Chairman said: “To date, Wananchi has been an innovator in the African media and telecoms sector through the deployment of Africa’s first triple-play cable network. With this investment round we continue to fund the innovation and expansion of the cable network and the launch of the DTH platform.”

Commenting on the investment, Bryce Fort, Managing Director at ECP said, “We believe Africa has tremendous growth potential in both the PayTV and broadband internet segments. Wananchi’s cable, DTH and programming platforms combined with its strong management make the company ideally suited to capitalize on this growth by capturing the surplus consumer demand.”

New York based Investment bank Moelis & Company were retained as financial advisors to Wananchi.

About Wananchi Group Holdings

Established in 2007, the Wananchi Group (WG) is the first competitive triple-play provider in East Africa, and is positioned to become the premier media operator in the region. WG is a holding company providing common senior management to seven cable and broadband companies in Kenya and Tanzania.The Company has already achieved significant milestones in its less than two years of operations, including:

Market leader with first mover advantage: Through its strategic acquisitions, WG is now the leading residential provider of cable and internet service in Kenya as well as the leading business communications provider in Tanzania.

30%+ Take-up rate among consumers: Today WG’s 187km of cable network passes approximately 37,000 homes in Kenya.

Prominent international and regional shareholders: In addition to the involvement of EACP, ECP and OPIC (The Overseas Private Investment Corporation of the US Government) Wananchi Group can count prominent East Africans among its shareholders, including executives of the biggest financial and communications companies in the region.

About East Africa Capital Partners

East Africa Capital Partners (EACP) is a technology, media and telecommunications sector focused venture capital Fund Manager investing in the greater Eastern Africa region. EACP’s central hypothesis is that Eastern Africa’s ICT Sector is set to undergo a period of sustained growth that will provide above average returns on carefully selected investments in technology, media & telecoms growth equities.

EACP have raised the ATMT Fund 1, LLC, which is a US$ 100m Fund targeting investments that will service infrastructure bottlenecks in the ICT sector in Eastern Africa. The Fund was made possible through a commitment of US$50m from OPIC (The Overseas Private Investment Corporation of the US Government) with the rest being provided by a variety of private equity investors. EACP are now in the process of actively investing these funds in the region.

About Emerging Capital Partners

Emerging Capital Partners (ECP) is a leading private equity fund manager dedicated to making investments in leading companies across the African continent. Since its founding in 2000, ECP has raised more than US$1.8 billion and has made over 50 investments in African companies through seven funds. In addition to its presence in Washington DC and Paris, ECP has six offices across the African continent with a team of investment professionals who hail from 12 African countries.

ECP is committed to environmental, social and governance (ESG) principles and in 2010 pledged to operate under the United Nations’ Principles for Responsible Investment (UNPRI). ECP’s investments are the most diversified of any African Private Equity firm with impact capital in over 40 African countries. Sectors include financial services, telecommunications, natural resources, agriculture and infrastructure.