Stears Valuation Benchmarks (2024): African Private Markets by Revenue Band

Introduction

This report is part of the 2024 Stears Valuation Benchmarks, which analyses valuation multiples across the continent’s private capital markets. This edition focuses on valuation trends by company revenue band from 2020 to 2024, examining implied EV/EBITDA and EV/Revenue multiples across a curated set of disclosed transactions involving private African companies.

Key Takeaways

1. Smaller companies attract premium valuations, driven by growth potential and investor optimism. Firms in the $0–$5M and $5M–$50M revenue bands command the highest revenue and EBITDA multiples, reflecting investor appetite for scalability, product-market fit, and future monetisation potential. Even loss-making companies in these bands are often rewarded with rich revenue multiples, underscoring the weight placed on market traction and future cash flows. For PE funds, this highlights strong opportunities in early- and mid-growth stages, where capital efficiency and future upside outweigh current profitability.
2. Mid-sized companies face a “valuation valley” due to a perceived lack of scale or breakout potential.