Communiqué 50: How to invest in Africa’s creative industry, Part 2

Here’s what African creative economy investors and entrepreneurs need to do to ensure that the capital flowing into the industry doesn’t waste.

1. Dancing to the tune

2023 was a dream for Mavin Global, one of Africa’s most prominent music entertainment companies. It ended the year with the most successful Afrobeats song of all time, Rema’s Calm Down, which raked in commercial and award success in equal measure. Its roster was also blossoming, producing breakout star after breakout star. But 2024 was about to be even better.

In the early parts of the year, the company secured a majority acquisition from Universal Music Group, in a deal reportedly valued at $150-200 million. This was a major liquidity event for Africa’s creative industry, and it was a long time coming.

A few years prior, in 2019, Washington-based Kupanda Capital in partnership with TPG Growth, a subsidiary of the U.S. private equity firm TPG, injected $5 million into Mavin Global in a deal valuing the company at $9.5 million. A follow-on investment round from Kupanda saw Mavin's valuation rise to $25 million. With this war chest, the company capitalized on the worldwide growth of Afrobeats, incubating and launching artists like Rema and Ayra Starr to global stardom.

In 2022, Africa was the fastest-growing continent for recorded music consumption, and annual music streaming revenue was projected to triple to $314 million by 2026 from $92 million. Given this trajectory, it was only natural that a significant percentage of creative industry investments focused on the continent’s music industry, as foreign investors from Kupanda to Warner Music tried to capture a piece of an expanding pie.

The Film and TV industry was not left out in this deluge of investments. French broadcast giant Canal+ made strategic acquisitions and streaming platforms like Netflix and Amazon Prime funded original content development. Netflix, in particular, spent $175 million in sub-Saharan Africa to license and produce content between 2016 and 2022. Africa’s gaming industry also attracted investors, with Sony launching a $10 million fund to support it.

These sectors have captured a significant part of the continent’s capital inflow, but several investments are yet to produce the expected results.

In part one of this essay, we outlined the problems with creative industry investment. In part two, we will explore the strategies that ensure sustainable growth and global competitiveness.