Convergence Partners, a private equity firm, raises $120 million to advance digital inclusion in Africa
Convergence Partners, a private equity firm, raises $120 million to advance digital inclusion in Africa
Convergence Partners, a private equity firm focused on the technology sector in Sub-Saharan Africa, announced the raising of US$120 million for its third fund, the Convergence Partners Digital Infrastructure Fund (CPDIF). The fund intends to close with a final capitalization of US$250 million.
Convergence Partners remains Africa's largest private equity investor in digital infrastructure, with over US$400 million in capital under management.
CPDIF investors include leading development finance institutions such as the CDC Group (the United Kingdom'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).
CPDIF investments will be motivated by the infrastructure requirements of emerging growth themes in the digital infrastructure ecosystem, including 5G, cloud, Internet of Things (IoT), artificial intelligence (AI), fintech, and network virtualisation.
CPDIF's initial investment is in Ctrack, which was announced earlier this year. As a Data Analytics Company serving the fleet management and insurance industries, the company is at the cutting edge of AI and IoT, with all of its solutions delivered via the cloud.
Additionally, the fund has a strong and quantifiable impact objective, and through its participation in Africa's digital infrastructure build-out, it will boost entrepreneurship, innovation, skills development, and job creation by significantly increasing access to the internet and all of the critical digital tools it offers.
Africa remains by far the region with the least access to broadband and digital technology
Despite significant progress in the deployment of digital infrastructure on the Continent, fixed broadband penetration in Sub-Saharan Africa remains low, at approximately 7% of the population. There is still a significant investment opportunity to address digital inclusion, with the World Bank estimating that more than US$100 billion in capital will be required to bring Sub-Saharan Africa up to acceptable levels of digital access by 2030.
Brandon Doyle, CEO of Convergence Partners, comments on the raise:
“We are overjoyed to have reached this milestone, especially given the headwinds facing African private equity fundraising in general and the impact of the Covid pandemic on business activity over the last 12 months. We are extremely pleased with the level of support received from both repeat and new investors, which we believe reflects our strong track record and the opportunity presented by CPDIF at this critical juncture in both the technology and African contexts.”
CPDIF is a continuation of the strategy that Convergence Partners has successfully implemented across its funds under management since its inception in 2006.
Convergence Partners has invested in submarine cable systems, geostationary satellites, terrestrial long-haul, metro, and access fiber, wireless networks, and data centers over the last 15 years, as well as the services provided by these networks, including enterprise connectivity, SD-WAN, fintech and health technology solutions, and data switching.
