Convergence Partners, a private equity firm focused on the technology industry in Sub-Saharan Africa, announced the US$120 million first closure of its third fund, the Convergence Partners Digital Infrastructure Fund (CPDIF). The fund’s ultimate goal is to raise $250 million. Convergence Partners remains Africa’s largest private equity investor in digital infrastructure, with more than US$400 million under management.
The CDC Group (the UK’s development finance institution), the United States International Development Finance Corporation (DFC), the European Investment Bank (EIB), the International Finance Corporation (IFC), and Proparco (the private sector arm of the Agence Française de Développement — AFD Group) are among the investors in CPDIF.
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“We are delighted to have achieved this milestone particularly given the headwinds in African PE fundraising generally, and the impact of the Covid pandemic on business activity, over the past 12 months. We are very pleased with the level of support from both repeat and new investors and believe this reflects our solid track record and the opportunity CPDIF presents at this crucial time in both a tech and African context,” says Brandon Doyle CEO of Convergence Partners.
Here Is What You Need To Know
- The infrastructure needs of emerging growth topics in the digital infrastructure ecosystem, such as 5G, Cloud, Internet of Things (IoT), Artificial Intelligence (AI), finance, and network virtualisation, will drive CPDIF investments. CPDIF made its first investment in Ctrack, which was revealed earlier this year. As a data analytics company that serves the fleet management and insurance industries, it lies at the crossroads of AI and IoT, with all of its products being supplied via the cloud.
- The fund also has a strong and measurable impact objective, and will boost entrepreneurship, innovation, skills development, and job creation by dramatically increasing access to the internet and all of the critical digital tools it provides through its participation in the development of Africa’s digital infrastructure. In terms of broadband and digital technology access, Africa is by far the most underserved continent. Despite progress in the deployment of digital infrastructure on the continent, fixed broadband adoption in Sub-Saharan Africa remains low, with just approximately 7% of the population having access.
- CPDIF is a continuation of the strategy that Convergence Partners has successfully adopted throughout its funds under management since its creation in 2006. Convergence Partners has invested in submarine cable systems, geostationary satellites, terrestrial long-haul, metro, and access fibre, wireless networks, data centers, and network services such as enterprise connectivity, SD-WAN, fintech and healthtech solutions, data switching, and more over the last 15 years.
“In the past 20 years, we have witnessed the exponential growth of internet penetration on the African continent. Internet penetration in sub-Saharan Africa alone has grown tenfold, compared to the threefold increase the rest of the world has seen. As Convergence Partners, we pride ourselves on contributing to this growth through our numerous communication infrastructure investments across the Continent. However, the COVID-19 pandemic has shown us that there is still much work to drive digital inclusion. Today, Africa is experiencing the highest growth in international internet bandwidth compared to any other region in the world. As we embark on this journey as CPDIF, the next twelve years will be spent continuing to build on our original vision of ubiquitous pan-African communications. As the African Continental Free Trade Area (AfCFTA) commences in the same year, we embark on the next step of our journey as Convergence Partners. We believe that AfCFTA will benefit immensely from the availability of digital infrastructure. Our greatest strength is our knowledge of technology, investments, and deep understanding of the African market and cultures,” Andile Ngcaba, Chairman of Convergence Partners, said.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer