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African coffee shop chain attracts investment from private equity firm

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In a confirmation of the opportunities that east Africa’s growing middle class offers, private equity firm Emerging Capital Partners (ECP) last week announced that it has invested in a Kenyan coffee shop chain.

A Nairobi Java House outlet

A Nairobi Java House outlet

According to a statement by ECP, the investment into Nairobi Java House is the first private equity deal in east Africa’s restaurant industry.

ECP did not disclose the finer details of the transaction, but said that the capital will be used to expand the chain’s operations and the number of locations around Kenya and the broader region.

Nairobi Java House opened its first outlet in 1999 and has since expanded to 18 locations throughout Kenya’s capital city, with new branches set to open in the cities of Mombasa, Nakuru and Kisumu. The chain serves African-grown coffee alongside a full menu that includes everything from hamburgers to Mexican food.

“Nairobi’s affluent and middle class have both embraced Nairobi Java House as a high-quality, affordable restaurant destination. By day, it is frequented by business professionals for a quick snack or a meeting over breakfast, coffee, or lunch; by night and at weekends, the crowd returns with friends and family for socialising and casual dining in the unique family-friendly ambiance,” said ECP in a statement.

Nairobi Java House has also launched Planet Yogurt, a self-serve frozen yogurt brand, now with four branches in Kenya.

“Nairobi Java House enjoys an attractive positioning as both aspirational and yet obtainable by east Africa’s rapidly expanding consumer middle class and, as such, it sits perfectly with ECP’s investment thesis. We seek to back proven global business models that are being pursued across Africa and deployed to international standards. Nairobi Java House is a prime example of the success of the fast casual dining restaurant model and a reaffirmation of the growth to be found in East Africa,” commented Bryce Fort, managing director of ECP.

ECP is one of the more well-known Africa-focused private equity firms. It has been active across the continent for 12 years. The firm has made over 50 investments and has accomplished more than 20 exits in a range of sectors, including financial services, telecoms, consumer products, agribusiness, logistics, industrials, and natural resources.

The past few years have witnessed a new wave of private equity activity in Africa. “In 2007, sub-Saharan Africa accounted for 3% of emerging market fund-raising; by 2010, this had doubled to 6%. Strong growth prospects, particularly in contrast to those in developed markets, are attracting private equity capital,” says Ernst & Young in a recent report.


  • Coffee Shop Franchise

    Nice post and the information given in this blog is really good.

  • Vincent O.

    Promising investment. It brings memories of nice visits to Java House.

    The problem with all such new places, all of them are nice, clean, posh, etc – at the beginning – and after a just few years they become hopeless like all the other places in the past because maintenance is very poor in Kenya.
    Keeping high standards on a continous basis is just not an ingrained regimen or part of the way there, based on past broader observations, so pardon personal view … just as in many parts around the world. Maybe the real reason for such deterioration is just over population in Nairobi, lack of motivation, etc. I recall Java House’s apple pies and a few other menu items that were well done, very tasty and delicious. And yes I remember their dark red T-shirts with Java House prints/logo. Very beautiful staff uniform. Very impressive.

    Lamu Coffee/Tea days:
    In my younger years, there was Bruce House which housed the cute Lamu Coffee/Tea shop, close to the City Council in Nairobi, where I was taken by my parents during weekends for nice treats like rolls, pies, cakes, juices, etc … and it even had Lamu hand-carved chairs (from coastal city of Lamu) and some Arabesque style carpets on the walls, extremely beautiful place … but later on, about 10-15 years later it became very bad, dirty and not even safe to sit down and eat there. I think that it closed down eventually.

    Kenya House Coffee/Tea days:
    Then I remember Kenya House and its Coffee/Tea shop downstairs with exceptionally good quality fresh coffee, tea, meats and chicken pies, etc … wow … good memories … we would eat there or take home to eat. After 15 years or so, that Kenya House cafetaria, deteriorated very much, it became very dirty with some people even sleeping on those long chairs as if it were a railway station transit, smelling of urine and all sorts, with even bed bugs in the seat paddings or crawling underneath the chair back walls … cups were no longer washed properly, etc.

    Grand Regency Hotel days:
    Then came Grand Regency Hotel, the new and top posh hotel in Nairobi; the Rotary Club of Nairobi even selected it as its venue for weekly meetings and all other related functions. It had a super clean and safe parking place in its well-fenced compound and another one in its underground area.
    WOW … those were the days, 2004/05, when there were so many car robberies in Nairobi from other parking lots, and even people walking in the streets were being attacked and robbed in broad daylight … things were bad everywhere in Nairobi, but not at the Grand Regency Hotel. The hotel had top security guards and systems, ample gardens, where no “parking boys”, thieves etc., could even loiter around or come close by. It went on like that for some years, then all over sudden when a minority group of Somali’s living in Nairobi became a nuisance; already in many hotels and other public places in Nairobi, they started visiting the Grand Regency in droves.
    It first started with Somali VIPs who started coming into the hotel as they were holding preliminary meetings towards forming the New Somali Government … it continued like that for about one year. Then local Somali’s from Nairobi areas, such as Eastleigh, used to come and visit these VIPs, monopolizing the spaces in the coffee shops, restaurants; and just as they did with the Trattoria Restaurant in the Nairobi city center … for hours and hours and hours. One time they even took our usual scheduled ballroom meeting place for their own election meeting and we had to be squeezed into another small room upstairs which was not very nice. And that is the time, even covered publicly by the national newspapers, when they started fighting each other during the meeting, fighting with chairs, some ran out bleeding badly screaming for help, etc … I remember that day very well, ambulances came to ferry the injured to the hospital, about 150 elegant chairs had been broken alongside expensive window and wall mirrors. That was the beginning of the deterioration process of that once-posh facility. Then later on I heard that the whole thing was sold to some Libyans … then I don’t know anything else afterwards.

    I just hope the same does not happen with this chain of Java House.

  • Arsène du Gabon

    Kenya is after South Africa, the country the most advanced in SSA.
    Diversification et sophistication of economy, middel class in growth, kenyan people are educated, and a newspapers free.