Convergence Partners, a private equity investor focused on the technology sector across Sub-Saharan Africa, said Thursday it has hit the first close of its third fund at $120 million, just under half of its overall target.
Convergence Partners Digital Infrastructure Fund (CPDIF) is targeting a final size of $250 million though it has a hard cap of $300 million, as previously reported by The Capital Quest.
Investors in CPDIF include CDC Group Plc, the US DFC, the European Investment Bank, International Finance Corporation and Proparco.
CPDIF will focus on investments in the digital infrastructure ecosystem, specifically fibre, wireless, data centres and towers as well as 5G, cloud, Internet of Things (IoT), artificial intelligence, fintech and network virtualisation.
The fund struck its maiden deal earlier this year when it signed an agreement with Nasdaq-listed Inseego Corp to acquire Ctrack’s operations in Africa and the Middle East for ZAR529 million ($36.2 million).
Ctrack is a telematics software-as-a-service digital infrastructure platform. It provides fleet management, insurance and weather telematic solutions and asset tracking solutions to its subscribers in Africa and the Middle East.
Convergence said that despite the advances in the rollout of digital infrastructure in the continent, fixed broadband penetration in Sub-Saharan Africa still lags far behind at about 7% of the population. It cited the World Bank estimates that more than $100 billion of capital is required to bring Sub-Saharan Africa to acceptable levels of digital access by 2030.
“Today, Africa is experiencing the highest growth in international internet bandwidth compared to any other region in the world,” said Andile Ngcaba, chairman of Convergence Partners. “As we embark on this journey as CPDIF, the next 12 years will be spent continuing to build on our original vision of ubiquitous pan-African communications.”
Convergence Partners began operations in 2006. It has invested in submarine cable systems, geostationary satellites, wireless networks, data centres, as well as enterprise connectivity, fintech and health-tech services, and other areas.
The PE firm has assets under management in excess of $400 million which it deploys across southern, east and west Africa through three funds – Convergence Partners Investments, Convergence Partners Communications Infrastructure Fund and the CPDIF.