Equity Firm Raises $120m To Drive Digital Inclusion In Africa

Convergence Partners, A Private Equity Investor Focused On Tech Sector In Sub-Saharan Africa, Closed First Of Its Third Fund With $120M.

Convergence Partners, a private equity investor focused on the technology sector in sub-Saharan Africa, has closed the first of its third fund with $120 million. The fund, known as the Convergence Partners Digital Infrastructure Fund (CPDIF), is targeting a final size of US$250 million.

The company said in a release issued in Accra yesterday that investors in the CPDIF were leading institutions that continued to support African growth such as 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).

The “CPDIF investments will be driven by the infrastructure needs of the emerging growth themes in the digital infrastructure ecosystem, specifically fibre, wireless, data centres and towers, among others, as well as fifth generation (5G), Cloud, Internet of Things (IoT), Artificial Intelligence (AI), financial technology (fintech) and network virtualisation.The CPDIF’s first investment is in Ctrack, a transaction that was announced earlier in the year,” the release said.

Digital infrastructure

It added that the fund also had a strong and measurable impact objective and, through its participation in the build-out of Africa’s digital infrastructure, it would boost entrepreneurship, innovation, skills development and job creation while massively boosting access to the internet and all the critical digital tools it offers.

“Africa remains, by far the most underserved region in terms of broadband and digital technology access. Despite the advances in the rollout of digital infrastructure on the continent, fixed broadband penetration in sub-Saharan Africa still lags far behind at about seven per cent of the population.

“There is a massive investment opportunity that still exists to address digital inclusion with the World Bank estimating that more than US$100 billion of capital was required to bring SSA to acceptable levels of digital access by 2030,” it said.

The Chief Executive Officer of Convergence Partners, Mr Brandon Doyle, said his outfit was delighted to have achieved this milestone, particularly given the headwinds in African private equity 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 the CPDIF presents,” Mr Doyle said.

This news was originally published at Graphic.

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