Convergence Partners closes $296mn to fund digital infrastructure in Africa

Convergence Partners, a leading investment fund manager focusing on technology in Africa, has successfully closed a funding round that raised $296 million. The amount raised exceeded the initial target by 18%, bringing the total asset base to over $600 million across 35 investments since the fund's establishment in 2020. The chairman and founding partner, Andile Ngcaba, shared insights on the success of the fund and the growing demand for digital infrastructure in Africa. Andile Ngcaba highlighted Africa's position as a destination for growth, driven by the increasing need for new infrastructure in data centers, optics, artificial intelligence, and other tech areas. With a focus on West, East, and Southern Africa, Convergence Partners aims to address the rising demand for digital infrastructure as the continent's population is projected to reach 2 billion in the next 13 years. Ngcaba emphasized the critical role of connectivity in transforming schools, businesses, and enterprises of all sizes in Africa. The funding round saw continued support from existing investors, including Development Finance Institutions (DFIs) from North America, Europe, and the UK, as well as commercial institutions from Europe and Africa. Ngcaba noted the addition of new African investors to the fund, increasing the number of Limited Partners (LPs) to around 16-17 investors. The growth fund's tech-focused approach has attracted investors seeking returns in the rapidly expanding digital infrastructure sector. In the wake of global tech companies announcing job cuts and facing challenges post-pandemic, Ngcaba discussed the industry's shift towards Web 3 technologies. This distributed architecture model is disrupting traditional Web 2 structures, prompting companies to adapt and undergo digital transformation. Ngcaba highlighted the importance of companies evolving their skill sets and knowledge base to thrive in the evolving tech landscape, characterized by lower costs for compute power, storage, and bandwidth. As Africa emerges as a prominent player in the tech industry, Convergence Partners' successful funding round underscores the continent's potential for growth and innovation. By bridging the digital infrastructure gap and investing in key tech sectors, the fund is poised to contribute significantly to Africa's digital transformation journey.