All the Fuss in Convergence Partners’ $296M Raise
For the Africa’s vibrant and expanding private firms, private equity has proven effective in bridging the gap between self-financing and traditional capital market activity. Private equity has profited from advances in African investment environments and experienced some remarkable triumphs, garnering recognition as an efficient and cutting-edge vehicle for private-sector development on the continent.
Convergence Partners, a private equity firm focused on Sub-Saharan Africa’s technology sector, has closed its Convergence Partners Digital Infrastructure Fund (CPDIF) at $296 million (R5.1 billion), exceeding its initial objective by more than 18%.
Convergence Partners co-founder Andile Ngcaba claims that this accomplishment was made despite the continent’s tepid private capital fundraising in 2022. According to the statement, CPDIF, which just closed, represents Convergence Partners’ largest fund to date and brings the company’s total funds under management to more over $600 million.
Leading global and regional development finance institutions, pension funds, and financial institutions based in Europe and Africa were among the new and current investors who supported the closing.
“The closing of CPDIF is a major step forward for Convergence Partners and for the development of the digital economy in Sub-Saharan Africa,” says Brandon Doyle, CEO and founding partner of Convergence Partners.
“This closing is just the beginning, and we look forward to working with our investors and partners to build the digital infrastructure required to support the growth of the region’s digital economy. We strongly believe such collaborations promote innovation, entrepreneurship, skill development and job creation by vastly expanding access to the internet and all the essential digital tools it provides.”
About the Convergence Partners Digital Infrastructure Fund
CPDIF launched in June 2020, and in July 2021 it had its first closing of $120 million. The fund concentrated on making investments in Sub-Saharan African digital infrastructure prospects for the expansion of the region’s digital economy, investments must be made in fiber networks, data centers, wireless, towers, cloud, internet of things, artificial intelligence, and other important digital infrastructure.
CPDIF aims to create and support initiatives that support access to education, financial services, healthcare, and other essential services through digital technologies in addition to investing in tangible assets.
According to Convergence Partners, since inception, it has seen the need to invest in this space, motivated at the time by the International Telecommunication Union’s “The Missing Link/Maitland Report”.
Years later, the firm says, there is still more work to be done if “we wish to close the digital divide and ensure Africa is able to reap the benefits from the current and next iteration of the technologies”.
Andile Ngcaba speaking said: “We are extremely grateful for the continued support of our repeat investors and the new support given to us from first-time investors that have joined us on this journey to address the challenge of the digital inclusion across the continent, one technology at a time.”
What the Funding Means
Due to the recent worldwide push toward digital technology, private equity investment in Africa has been robust. Survey found that over time, investors’ capital contributions to private equity investments in Africa have increased significantly. Over the past two decades, private equity activity in Africa has increased dramatically and developed into a more well-known investment area. In 2023, this pattern is most likely to persist. The VC business in Africa is greatly influenced by this expanding dynamic, which fosters an atmosphere that is conducive to investment, entrepreneurship, and innovation.
Andile Ngcaba, chairman of Convergence Partners says the firm was ensuring the sustained growth of digital technologies across Sub-Saharan Africa, which is crucial for the startup ecosystem. He also reaffirmed its commitment to continue to support the growth and development of the region’s digital economy through investments in critical digital infrastructure.
“As we are seven years away from 2030, we commit to addressing SDGs [sustainable development goals] and preparing digital infrastructure for Africa, which is soon to be home to two billion people, with the youngest population on our planet.
“We will continue to build on our original vision by investing in digital infrastructure that is a key enabler for digital inclusion. This fund will enable us to continue leveraging our deep knowledge of technology, investments and the African market to deliver measurable impact.”