How do you value the bizi?

How do you value a portfolio of fast-growing, profitable African SMEs? Carefully. One by one. Using a mix of fundamentals, depending on the stage of growth, historic performance, and other factors:

Recorded live at Africa Eats’ 2026 Annual Gathering. Africa Eats’ co-founders Luni Libes and Jumaane Tafawa explain to the bizi how the world values their companies, and through that how Africa Eats’ own valuation is determined. A glimpse into the internal-only Day 2 activities of that event.

AI SUMMARY:

1. Methods of Determining Company Valuation

The total value of Africa Eats’ internal investments (as of calendar year 2025) is estimated at $34 million. Four main approaches are used to justify what individual companies are worth:

• Market Capitalization (Public Companies): For the two publicly traded portfolio companies (such as Ziweto and PMP), the valuation is taken straight from the market capitalization listed on tuesday.africa. While this is a clear metric, it is generally considered a conservative or “low” estimate compared to what a private buyer would actually pay.
• Recent Equity Investments: If a company has successfully closed an outside funding round in the last six months, Africa Eats uses the price per share paid by that new investor as a concrete baseline.
• Impending Public Offerings: For companies currently in the process of going public (such as “TRUK“), the valuation is calculated using the established share price set for the public offering, especially if backed by financial commitments from early investors.
• Revenue Multiples vs. Earnings Multiples: For the remaining 19 private companies, Africa Eats blends two internal models:
  1. A traditional Venture Capital (VC) method based on a multiple of revenues.
  2. A Private Equity (PE) approach based on a multiple of earnings (specifically, five times EBITDA).

2. The Shift to Profit Optimization

As portfolio companies mature and cross the $1 million annual revenue milestone, institutional co-investors shift entirely away from looking at revenue growth and focus exclusively on profit margins.

• Potential investors are much happier seeing flat revenue with doubled profits than doubled revenue with flat profits.
• It is highly rare to see a company that is both fast-growing and highly profitable. Consequently, founders need to strategically transition from aggressive scaling to maximizing profit margins (e.g., aiming to move from 5% to 15% margins), which drives company valuation higher than doubling top-line revenue.

3. Public Markets

To create more transparency in valuations, Africa Eats is changing its funding pipeline:

• Alternative Funding Channels: Instead of relying on typical PE investors, Africa Eats went public and is looking to list on exchanges like Nairobi to unlock non-traditional capital.