What is happening, however, is African startups becoming acquirers themselves. In February, Lenya's

BitPesa, which raised two funding rounds last year to take its total secured investment to around the $10 million mark, bought Spain-based online money transfer platform Transfer Zero. Ghanaian marketing startup Kudobuzz has made two acquisitions this year, buying e-commerce product Retail Tower and advert creation tool Ad Geek. This was a process begun by Nigerian on-demand delivery startup Metro Africa Express (MAX) late in 2016 when it acquired Lagos-based Easy appetite. But why is this happening, even before the African tech startup space has matured to the point where startups are serious targets for more major acquirers. Bit Pesa chief executive officer (CEO) Elizabeth Rossiello says the Transfer Zero acquisition came about as the Spanish firm was a Bit Pesa customer and the two teams had a strong working relationship. "The acquisition came out of the realization that we could be more successful working together and combining our assets," she said. That said, it was still a very big deal for an African tech startup to buy out a European one. "I'm not sure what the numbers are, but there are very few small African startups that have grown in the last few years to purchase a European payments company. It takes a lot of corporate governance, financing, compliance and legal work to develop an acquisition," says Rossiello. "There is a lot of operational execution required in the months afterwards to ensure optimization of the new assets. We are really proud of our team's work and achieving this milestone event." She says she sees a number of such consolidations occurring over the next few years as certain sectors slim down. Spaces such as fintech, for example, are crying out for consolidation, with significant stakeholders preaching its necessity. The Finnovating for Africa report released last year by Disrupt Africa, for example, found there were 125 payments and remittances startups active across Africa and 31 in Nigeria alone. Mergers, acquisitions, and - alas - closures are necessary and inevitable as the space evolves. "There has been a long period of innovation and entrepreneurship, but there is a lot of overlap that is not efficient," Rossiello said.

QUESTION 1 (20 Marks)

1.1 Explain the reasons for the acquisition trail by African start- ups. (6 marks)

1.2 Using your own examples, analyse the effectiveness of Mergers & Acquisitions (M&A's). (14 marks)