African buyout firm Convergence Partners has secured $296 million to purchase technological assets on the continent, according to chairman Andile Ngcaba. The capital raise brings the firm's total funds under management to around $600 million and makes it one of the first private equity funds raised for sub-Saharan Africa this year. The majority of the funding came from pension funds, development organizations, and existing investors in the US, UK, Europe, and Africa.
Convergence Partners is looking to invest in technology assets such as data centers and fiber-optic cable on land and at sea and has already compiled a pipeline of potential funding targets. Africa's rapidly growing population, particularly its younger, tech-savvy demographic, is driving the need for more investment in technology infrastructure such as data centers.
According to Ngcaba, Africa needs an additional 700 data centers by 2030 and roughly $100 billion in investment to address the digital divide. Convergence Partners wants to be involved in addressing this gap and contributing to its closure.
Private equity deal-makers have recently raised billions of dollars globally but have been hesitant to engage in Africa. However, other funds such as Development Partners International LLP and Helios Investment Partners have invested substantial sums on the continent, and tech giants such as Alphabet Inc., Amazon Web Services Inc., and Equinix Inc. are showing increasing interest. This is contributing to a maturing market and enhancing deal-making and exit prospects for private equity and others, says Ngcaba.
Convergence Partners has a 20-year history of operating in Africa and has made investments in companies including Vodacom Group Ltd. and Nedbank Group Ltd.
The recent $296 million capital raise by buyout firm Convergence Partners to purchase African technological assets is expected to have a positive impact on startups in the region. This capital raise brings the firm's total funds under management to approximately $600 million, making it one of the first private equity funds obtained for sub-Saharan Africa this year. With a focus on investing in technology assets ranging from data centers to optic cable on land and sea, Convergence Partners is poised to play a significant role in addressing the growing demand for technology infrastructure in Africa.
As Africa's population continues to expand at a rapid rate, with younger people becoming increasingly tech-savvy and using their mobile phones to access services like banking and shopping, the need for investment in technology infrastructure on the continent is becoming more pressing. The continent is expected to need an additional 700 data centers by 2030, as well as roughly $100 billion in investment by that time, to bridge the digital divide and provide better access to technology for all.
The investment by Convergence Partners, along with the interest being shown by tech behemoths like Alphabet Inc., Amazon Web Services Inc., and Equinix Inc., is expected to enhance deal-making and exit prospects for private equity and others, contributing to a maturing market in Africa. This, in turn, is expected to provide more opportunities and resources for startups in the region, enabling them to grow and expand their reach.
In conclusion, the $296 million capital raise by Convergence Partners is a positive development for startups in Africa, providing access to much-needed capital and resources to help them grow and thrive.
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