The decision to sell or exit a tech startup typically fills investors and entrepreneurs in Africa with excitement, especially given the potential returns on investments. The recent proposal to buy the artificial intelligence startup InstaDeep from Tunisia has highlighted the significance of startup exits for both investors and founders. InstaDeep would be sold for $687M after over 9 years in business, making it possibly the most significant acquisition to have emerge from Africa. A total of £362 million in cash and BioNTech shares will be paid upfront for 100% of the outstanding InstaDeep shares, excluding the shares already owned by BioNTech, as part of the transaction. Shareholders in InstaDeep will also be qualified for future performance-based milestone payments totaling up to £200 million.

Although it took the founders of InstaDeep almost 9 years to develop such a valuable business, in this study we take into account the typical time it takes to develop a tech startup in Africa to the point where it is prepared for purchase or IPO (Initial Public Offerings), if the proper funding and management are used. We found that, on average, it would take an African tech startup roughly 6.5 or 7 years to mature up to the age of acquisition, although it may take up to 20 years in some situations, out of the total deals of 93 acquisitions and IPOs we analysed.

Read also Tunisian AI Startup InstaDeep Set For BioNTech SE Purchase At $684M

The following summarises our conclusions:

Sell Exit tech startup Africa Sell Exit tech startup Africa Sell Exit tech startup Africa

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard