Java House, a coffee and casual dining chain with humble beginnings at a Nairobi mall, continues to be a hot cake with African private equity firms Alterra Capital and Phatisa Group, the latest to grab a bite.

When Americans Kevin Ashley and John Wagner started Java House 26 years ago at Adam’s Arcade Mall, they pioneered and popularised the coffee café culture in Nairobi.

Now, the buffet of café and restaurant offerings in East Africa is huge, with Kenya’s Artcaffe, Uganda’s Café Javas (CJ’s) and a variety of global brands like KFC, Pizza Hut, Burger King and Subway serving up a storm of ever-increasing new outlets to cater to a growing middle class and the large expatriate population.

Pundits will be watching to see whether Java House will use the undisclosed capital outlay from the African private equity firms to spread its wings further across the continent.

There is a ready template for Java House. Over the years, South African eatery brands Nando’s, Wimpy, Spur, and Mugg & Bean have grown to be household names in Nairobi.

Since 2012, Java House ownership has changed hands four times, expanded across Kenya and crossed the border into Uganda and Rwanda.

In 2012, Washington DC-based Emerging Capital Partners (ECP) acquired a 90% stake. Java was wholly acquired by Dubai-based Abraaj Group in 2017 in a deal repeatedly worth over $100m. When Abraaj ran into financial trouble, UK-based firm Actistook over ownership in 2019.

Five years later, Alterra Capital and Phatisa Group have thrown their hats into the kitchen.

According to a notice by the Malawi-based COMESA Competition Commission, upon the conclusion of the deal with Actis, Alterra Capital will hold the majority stake, with Phatisa Group holding a controlling stake.

Alterra Capital Partners is a Johannesburg-based investment firm founded in 2020 that invests largely in financial services and telecommunications companies.

Africa’s richest man, Nigerian Aliko Dangote, is one of the notable investors in Alterra. Incidentally, Dangote has, in the past, unsuccessfully sought to invest in the Kenyan cement industry.

Phatisa Group is a leading African private equity fund manager established in 2005 that focuses on investments across the African food value chain.

Private Equity investments tend to support management buyouts and buy-ins in more mature companies that have an established trading history. In contrast, Venture Capital funds are typically a form of investment for early-stage, innovative businesses with strong growth potential.

Upon selling its stake in Java House in 2017, Emerging Capital Partners (ECP) invested in Artcaffé Group in 2018, acquiring what Reuters termed a “substantial majority” stake.

Over the past six years, Artcaffé, whose first restaurant opened at Westgate Mall in 2009, has engaged Java in a race to open outlets and corner the coffee and casual dining market.

Java House is part of the Java House Group and has Foodscape, Kukito, Planet Yogurt, and 360 Degrees Artisan Pizza in its stable. Priscilla Gathungu became the first female CEO of Java House Group in 2022.