FT ranks Starsight, Kawai Technologies, others as top Africa’s fastest growing companies

Oredola Adeola

From digitising informal trade to energy, fintech and mining, Kawai Technologies Limited, Starsight Power Utility Ltd, and three others have made it to the top ten Africa’s Fastest Growing Companies in the 2022 ranking by Financial Times(FT). This was revealed in the inaugural FT annual ranking released on Tuesday.

The inaugural FT annual ranking of Africa’s Fastest Growing Companies featured 75 companies that had grown between 8,800% (Kenya’s Wasoko) and 26% (Morocco’s Hightech Payment Systems) over the three-year period(2017- 2020).

The worldʼs leading global business publication based in the United Kingdom revealed that the two fastest-growing companies in Africa are in Kenya. Five of the top ten companies are in Nigeria, while the companies from the country got a total of 20 slots out of 72 companies listed on the ranking table.

EnergyDay in a review of the ranking gathered that AFEX Commodities Exchange Ltd, an Agricultural Commodities firm was third fastest-growing company on the ranking table, with 4289.8 percent absolute growth rate between 2017 and 2020. The company was said to have grown from a revenue of $800,000 to $31.7million within the years under review.

Zedcrest Capital Ltd, another Nigerian financial service firm was ranked the fifth on the ranking table, with 1481.8 percent absolute growth rate between 2017 and 2020. It recorded a revenue growth from $3.2 million to $43.5million within the years under review.

Starsight Power Utility Ltd, Nigeria energy firm was ranked 6th with 1154.4% absolute growth rate. The power firm recorded a revenue growth from $800,000 to $8.9million between 2017 and 2020.

Kawai Technologies Limited, Nigeria Support Services was ranked 8th with 535.7% absolute growth rate. The firm, which also offers services in the energy industry, recorded a revenue growth from $900,000 to $4.9million between 2017 and 2020.

West African Soy Industries Ltd, another Nigerian Agriculture commodities firm made it to the 9th spot on the ranking table.

Meanwhile Kenya has nine companies featured, compared to South Africa’s 24.
South Africa dominated the list numerically, with more entries than any other country – but the first SA company featured only at number 10 on the ranking table.

The FT created the inaugural list with research company Statista, and it ranks companies on the continent based on their compound annual growth rate (CAGR) in revenue between 2017 and 2020.

Some companies are missing from the list, the British paper says, for reasons that include private companies refusing to make their revenue figures. The survey required a chief executive or similar senior figure to certify revenue numbers.

Companies with less than $100,000 in revenue in 2017, and less than $1.5 million by 2020, were excluded, as were subsidiaries and branches of other companies.

Every company had to have its headquarters in an African country, and its revenue growth had to be organic.

Nigeria’s West African Soy Industries at nine and Kawai Technologies at eight, both had a growth rate of more than 500% in the period under review.

However, Northam, a South Africa’s precious metal firm, was the first company on the list that qualifies as a mass employer, with 18,288 staff – ten times more than the total headcount for the nine companies ahead of it. The procurement company was ranked 10th, as part of the listed 75 companies selected across Africa.

Kawai Technologies Limited, is a Nigerian supports services that provide comprehensive, on-demand, procurement and logistics expertise working with top-tier suppliers to deliver services to clients in Africa.

According to FT, the ranking table provided a snapshot of the corporate landscape in a continent where technology, energy, fintech and support-service businesses have had to adapt to a radically altered environment.

The ranking table by FT claimed, “Chief among the recent challenges has been operating within the tough restrictions introduced by many African governments to combat Covid-19. In the end, outside of South Africa and parts of north Africa, the health impact has been less severe than many feared.

“But the economic consequences of lockdown — especially in crowded urban settings where many live hand to mouth — have been devastating. A possible silver lining is that the pandemic has accelerated business trends already under way.

“From banks to education providers, and from start-ups to established businesses, companies have shifted further online and sought fresh solutions for customers and societies as a whole.

Wasoko, formerly Sokowatch, which heads the ranking, is one of several on the continent seeking to cut the cost of doing business in the massive informal commerce sector, by helping to deliver goods to traders more efficiently.

The Kenyan company achieved the highest compound annual growth in revenues between 2017 and 2020 and, in March, raised $125mn in a Series B funding round. Kenya is the third most represented country in the ranking, with nine companies, behind South Africa (24) and Nigeria (20), and ahead of Egypt (six).

These are also the markets that have attracted the most venture capital and where unicorns (companies valued at $1bn+) and would-be unicorns have proliferated.

However, FT revealed that many of the fastest-growing companies, especially in the fintech sector, are those seeking to tap Africa’s unbanked population, or markets that have previously been underserved or ignored.

The health and education sectors, for example — spurred by unmet need and rising aspirations — are among those offering most scope for growth. Not all the fastest-expanding companies are high-tech, however.

Some, such as AfricaWorks, offer co-working spaces — a real estate model that has had its difficulties but could plausibly benefit from hybrid post-Covid working patterns.

More traditional companies, among them miners and construction firms, also make the list, proving that not all fast growth is digital.

FT noted that much attention is likely to be paid to the innovative start-ups that are now attracting record funding, many of which are touting scaleable solutions to Africa’s deep-seated problems.

This inaugural FT list was compiled with Statista, a research company, and ranks African companies by their compound annual growth rate (CAGR) in revenue, between 2017 and 2020.

FT said that most of the fast-growing companies are privately held and do not publicly disclose detailed financial data, a ranking such as this can never claim to be complete.

The magazine claimed that the rigorous screening process it conducted also required senior executives to sign off on the figures submitted by their companies. This however means that the ranking can offer a meaningful insight into the health of these private businesses.

FT said the search for the company was extensive, but noted that the list was not exhaustive as some companies did not want to make their figures public or did not participate for other reasons.

It claimed Statista identified thousands of companies in Africa as potential candidates for the ranking, through research in company databases and other public sources.

These companies were invited to participate in the competition by post and email. The project was also advertised online and in print, allowing all eligible companies to register online via Statista or the Financial Times between October 6, 2021 and February 15, 2022.

The process required submitted revenue figures to be certified by the chief executive, chief financial officer or an executive committee member of the company. Following the application phase, Statista examined the officially stated revenue data of about 900 public companies in Africa.

High-profile companies that met the criteria for inclusion were added to the list (27 in total). The data were collected through research using official sources, such as publicly available earning presentations, investor relations websites, or annual reports.

Criteria for inclusion on the ranking table according to FT was a revenue of at least US $100.000 generated in 2017 and at least US $1.5mn generated in 2020. The companies are also expected to be independent (not a subsidiary or branch office of any kind). They were required to have an operational headquarters located in one of the African countries.

FT said, “Revenue growth between 2017 and 2020 that was primarily organic (ie “internally” stimulated). Countries that do not use the dollar to express revenues had to provide the average local currency value equivalent over the course of the relevant fiscal year.

“All countries on the African continent were eligible to participate. Calculation of Compound Annual Growth Rates. The calculation of company growth rates was based on the revenue figures submitted by the companies in their respective national currencies.

“The revenue figures were then converted into US dollars for better comparability in the ranking. The average exchange rate for the financial year indicated by the company was used for this purpose.

“The compound annual growth rate (CAGR) was calculated as follows: ((revenue 2020 / revenue 2017)^(1/3)) — 1 = CAGR Evaluation and quality assurance. All data reported by the companies were processed and checked by Statista. Missing data entries (employee numbers, address data, etc) were researched in detail.

FT however noted that those companies that did not fulfil the criteria for inclusion in the ranking were deleted, adding that the minimum CAGR required to be included in the ranking this year was 7.99 per cent.