Johannesburg-based private equity company that focuses on the technology sector across sub-Saharan Africa has announced that they will donate the first close of its third fund worth $120 million to promote digital inclusion in Africa, according to media reports.
The Convergence Partners Digital Infrastructure Fund (CPDIF) aims to raise a total of $250 million. Currently, it is the largest private equity fund that focuses on Africa’s digital infrastructure with over $400 million of capital under its management.
The company was founded in 2016 and it invests as value-adding partners into private equity and infrastructure opportunities in sectors like technology and digital across sub-Saharan Africa.
The funding has also caught the attention of leading institutions such as the CDC Group, the DFC, the EIB, IFC, and Proparco. The investment will also be channelled towards infrastructure that needs growth in the digital infrastructure ecosystem, especially the ones related to fibre, wireless, data towers, 5G cloud, Artificial Intelligence, Internet of Things (IoT), fintech and network virtualisation.
Brandon Doyle chief executive officer (CEO) of Convergence Partners told the media, “We are delighted to have achieved this milestone particularly given the headwinds in African PE fundraising generally, and the impact of the Covid-19 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 tech and African context.”
The funding is also expected to have a strong and measurable impact objective and it will hopefully have a positive effect on Africa’s digital infrastructure by boosting infrastructure entrepreneurship, innovation, skills development and job creation. To date, Africa remains to be the most underserved region in terms of broadband and digital technology access.
While there have been advances in the rollout of digital infrastructure, broadband penetration still lags behind. There is certainly a major investment opportunity that addresses digital inclusion. The World Bank estimates that more than $100 billion capital is needed to bring the continent to acceptable levels of digital access by 2030.