In three decades Andile Ngcaba has gone from being the postmaster general of SA to leading one of Africa’s largest private equity investors that is committed to building what he calls “Digital Africa”.
His vision could help create an enabling environment for Africa’s young people to become part of the digital economy.
Ngcaba founded Convergence Partners in 2006, which evolved into a pan-African ICT-focused private equity investor.
The Johannesburg- and Lagos-based entity is the largest private investor dedicated to building Africa’s digital infrastructure. It has invested in companies that are creating opportunities for African youth in the continent’s digital transformation.
The investments have enabled the firm to rapidly grow its assets under management from R4.3bn in 2021 to more than R11bn in January 2023.
Through its investments in the technology sector, the company is creating job opportunities for Africa’s youth in Cloud, Edge AI (artificial intelligence), Lakehouse, Deep Learning, Automotive Ethernet or Software Defined Automotive or Vehicle, Message Queuing Telemetry Transport and Internet of Things.
More excitingly, Ngcaba and Convergence’s co-founders — Brandon Doyle (CEO), Idan Segal (chief investment officer) and Stefan Ferreira (CFO) — are creating job opportunities as part of the democratisation of Africa’s financial markets.
On Tuesday, the company announced that it had invested R182m in 42Markets Group to accelerate the development and expansion of its portfolio companies: Mesh, Andile and FXFlow.
“We are thrilled with our investment in 42Markets, which reflects our unwavering dedication to fostering digital infrastructure expansion throughout Africa,” said Ngcaba.
“42Markets’ expertise in decentralised finance, regtech and fintech, particularly in expanding global financial and capital markets to underserved regions aligns perfectly with our vision of utilising technology to bridge the digital divide and improve access for those in need.”
This investment follows a R5.1bn investment of new money in January from previous investors. It is a vote of confidence.
The new money will help the company drive digital inclusion in Africa.
Last month, Convergence-backed Comsol Networks announced plans to build private 5G networks for mining and manufacturing companies. The company is testing a 4G and 5G access network in Midland and KwaZulu-Natal, and is targeting smaller towns across the country.
As part of its vision to invest in Africa’s digital infrastructure — key to digital inclusion — Convergence completed an investment in CSquared, a broadband infrastructure company, in 2017.
The R2bn investment was made in partnership with Google, the International Finance Corporation and Mitsui & Co.
In November 2022, CSquared partnered with USAID to build an open-access fibre backbone in Liberia, Ivory Coast and Guinea. CSquared also operates 100km of fibreoptic cable in Kinshasa, the Democratic Republic of Congo, and has started building a terrestrial backbone in West Africa.
To create opportunities for Africa’s youth, Convergence has built a unified pan-African cloud and digital service provider that brings to market a truly relevant suite of next-generation technology solutions in Edge AI, network functions virtualisation and cloud. This was done through inq. which was formed in 2019 through the acquisition of Vodacom Business assets and the combination of existing businesses.
Inq. wants to be Africa’s number one AI service provider, which could unlock opportunities for the continent’s youth.
In 2021, Convergence bought Ctrack’s business in Africa and the Middle East from Nasdaq-listed Inseego. Ctrack is well positioned to use its market advantage to advance its ambitions in automotive technology by continuing to build its capabilities in the Internet of Things and AI sectors to benefit Africa.
Convergence is invested in several companies, including e4, Channel VAS, Inquba, Snapt, ESET and 4Di venture fund. Realised assets include Bloodhound, Dimension Data, Nedbank, Telkom, Vodacom and so on.
Ngcaba, who has been instrumental in transforming the telecommunications industry in SA and on the continent since 1991, believes that Africa continues to offer significant growth opportunities. He is banking on the youth demographic, which offers incredible opportunities as Africa undergoes digital transformation.
To upskill Africa’s youth, Ngcaba is also a patron of Cortex Hub, a non-profit, seed-funding incubation hub based in the Eastern Cape.
Last year, UK chip designer Arm partnered with Cortex Hub to develop its first ecosystem lab in SA. The lab focuses on educating, training, developing and offering a platform for demonstration of Arm’s capabilities within local tech innovation hubs, education institutions, developer communities and NGOs, as well as catalyse start-ups.
Therefore, Convergence is a company that is looking for opportunities in Africa, especially to continue to deliver measurable results by investing in Africa’s digital infrastructure.
The investor may also enable the African Free Continental Trade Area (AfCFTA) to flourish and increase intra-African trade. AfCFTA will benefit immensely from the availability of digital infrastructure being roll out by Convergence.
Will the company be successful with this? I am convinced that Ngcaba’s view of technology as a vehicle for change and his team knowledge of tech, and deep understanding of the African markets and culture will help Convergence succeed.
At the moment, there is no doubt that Convergence is a ballsy private equity company in Africa.
• Lourie is the founder and editor of TechFinancials.
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