Wakanow—a famous online travel agency in Nigeria focused on West and East Africa—received funding of $40 million from The Carlyle Group (NASDAQ: CG)—an american multinational investment firm.
The decade-old travel agency operates a network of traditional brick-and-mortar travel centers and has operations in Nigeria, Ghana, Kenya, United Arab Emirates and the United Kingdom. Wakanow is one of West Africa’s largest full-service online travel companies, providing its customers with a one-stop online booking portal for flights, hotels, holiday packages, and other travel services.
Wakanow enjoys strong brand recognition in its local markets, perks of persisting for a long times.
Carlyle is the same company that invested $147 million in the troubled Diamond facing an acquisition by Access bank—in the year 2014.
Yet, four years later, the US private equity remains bullish on African investments.
For this Wakanow investment, equity came from Carlyle’s Sub-Saharan Africa fund.
The investment adds to Carlyle’s experience in the online travel sector, where it has invested in companies such as C-trip—one of the major online travel agencies operating across China, CVC Brasil—a Latin American travel and tour operator and Vasco Turismo—one of the largest travel operations groups in Peru.
Speaking on the investment on Wednesday, Idris Mohammed—Managing Director, Carlyle’s Sub-Saharan African Fund team (CSSAF): “Wakanow has experienced incredible growth since inception, disrupting the travel market and taking market share both online and offline”.
“We believe that this strong growth trajectory will continue as Wakanow benefits from an expanding middle class across the continent in addition to increasing internet penetration and mobile connectivity, which is driving increased online traffic. We look forward to working with Wakanow’s management team to help them deliver on their vision for growth and expansion”, Idris added.
This is good for Wakanow and comes as a refresher. Because, at the start of the year, there were suspicions and rumours that the International Air Transport Association (IATA) were going to yank off Wakanow from its Billing and Settlement Plan (BSP) due to unpaid settlements signalling that Nigeria's largest travel agency was facing financial challenges. It was suspected that the devaluation of the naira made it difficult for Nigerians to travel outside the country. And on the flip side, Wakanow might have been reluctant to pass down the full cost of travel to her already distressed customers. But because they are a private company and they do not make their financial records public, it was hard for anyone to confirm whether or not they were indeed facing this financial challenges.
Also, observers are hopeful that this would help the travel agency meet defaulted financial obligations like payment of salaries.
Speaking on the investment, Obinna Ekezie—CEO, Wakanow said: “We are excited to partner with Carlyle as we continue to grow and expand in Africa and beyond”.
“Carlyle’s global footprint and scale, as well as its extensive experience and network in the online travel sector, will help us to further develop our offerings and broaden our customer base”.
Hopefully, this investment gives Wakanow a chance to retain their position as the country's leading travel agency and more.