Ringier Africa Deals Group, a joint venture between Swiss Ringier Africa AG and South African Silvertree Internet Holdings Ltd., announced the deal today.
The digital retail startup Dealdey — a Groupon-like startup — previously raised at least $1 million from the Swedish investment firm Kinnevik in 2011.
Kinnevik followed that with $5 million in series B financing in 2015. No equity percentage was given for either round so it’s not possible to extrapolate the valuation DealDey may have put forward for the Ringier Africa acquisition.
DealDey is one of a handful of players in Nigeria’s very fluid e-commerce space. The digital shopping site aggregates daily online discounts on popular goods and services. It brands itself as Sub-Saharan Africa’s largest online deals platform, naming “over 1 million users, 15,000 active merchants, and 20,000 verified listed businesses.” Alexa ranks the DealDay at 41 in Nigeria.
On a call, Ringier’s Leonard Stiegeler named the acquisition as part of an expanding Africa strategy “to invest fully in four verticals within Africa: classifieds, content, digital marketing, and e-commerce.”
The deal buys Ringier a platform to tap Africa’s expanding consumer markets through DealDeys’ existing online shopping network. The acquisition also follows the recent global investment in e-commerce company Africa Internet Group, which reached a $1 billion valuation after a $326 million round including Goldman Sachs and AXA Insurance.
These plays are largely motivated by the value proposition shaping up for digital commerce in Africa.
The continent’s consumer spending is estimated to exceed $1.4 trillion annually by 2020–$400 million of that is already occurring in Nigeria, estimates McKinsey’s Global Institute.
African e-commerce will generate some $75 billion in revenue by 2025, says McKinsey. This is contingent on core African economies improving profiles for power generation, broadband connectivity, and transportation infrastructure.
Ringier Africa Deals Group, already have a strong foothold in e-commerce across the continent. Their holdings include investments in online shopping sites in Kenya (Rupu), Ghana (Tisu), and South Africa (PriceCheck).
Ringier Africa GM Stiegeler views Nigeria—Africa most populous nation and largest economy—as an important online shopping space for the new Africa Deals Group. He also thinks the acquisition Ringier can position DealDey to go head to head with Nigeria’s big online retailers, such as Konga and Jumia.
“The country is an important entry market for e-commerce and there are significant players,” he said. “We really believe the deals model that relies more on local merchants and offers both goods and services can differentiate itself from the Amazon models that Jumia and Konga are running.”