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2023 Annual - (released February 2024)

SA's quarterly Private Equity & Venture Capital magazine


Convergence Partners continues to build African broadband infrastructure giant

by Michael Avery

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It’s easy to become jaded by the degree to which buzzword bingo permeates the African technology sector. You might end up with your front end in the cloud if you allow your artificial intelligence to drive you to the edge of the internet of things without being agile enough to recognise your metaverse from your big data. See what I mean?!


But when it comes to the real world of helping businesses digitally transform; that is, to take advantage of how consumers and clients operate, transact and collaborate online, then few private equity funds are capitalising on this better than Andile Ncgaba’s Convergence Partners.

Convergence Partners recently injected US$25m in equity into CSquared, to further its ambitions to become a scale player in broadband infrastructure on the African continent.

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Ngcaba is Chairman, Founder and majority shareholder of investment group, Convergence Partners.

Through Convergence Partners, Andile is also involved in significant new communications infrastructure projects across Africa, including Seacom (the first undersea fibre optic cable system serving Africa’s East Coast) which was ready for service on 23 July 2009; the first private sector satellite in Africa (Intelsat New Dawn), which was launched on 22 April 2011; and a recently announced new joint venture to bring high capacity, long-haul terrestrial fibre to South Africa (FibreCo).

Ngcaba was previously Director General of Communications in the first democratically elected government of South Africa in 1994. He left Government in 2003 to pursue a career in the private sector, after an eyebrow raising empowerment deal with Telkom. But that’s a story for another time.

If connectivity is shaping the future, CSquared is emerging as a leader in sub-Saharan Africa.

Convergence Partners Digital Infrastructure Fund (CPDIF) partnered with the International Finance Corporation (IFC) to help propel CSquared toward its ambitious goal of a Digitally Connected Africa. This strategic move not only bolsters the company’s financial standing, but also triggers a restructuring of CSquared’s ownership architecture.

Digitalisation, the transformative force of our era, holds the potential to reshape societies and economies. However, the digital divide persists, particularly in Africa, where only 36% of the population enjoyed broadband internet access in 2023 (as reported by the World Bank). Despite advancements in mobile internet, the region lags in broadband infrastructure, limiting the widespread benefits of digitalisation.

CSquared, originally incubated within Google in 2011, envisioned building metropolitan fibre optic networks as a carrier-neutral operator in sub-Saharan Africa. The company’s long-term vision strives to enhance internet penetration and reduce access costs by investing in the necessary infrastructure for digital transformation.

In 2017, with the infusion of capital from investors like Mitsui & Co, Convergence Partners Communication Infrastructure Fund and the IFC, CSquared embarked on an accelerated journey to deepen market penetration and expand geographically, operating in six African markets – Uganda, Ghana, Liberia, Kenya, the Democratic Republic of Congo, and Togo. CSquared’s collaboration with Google in Togo facilitated the historic landing of the Equiano cable in March 2022 – a landmark moment, transforming internet access in an underserved market.


The fruits of these efforts are evident in the increased accessibility, affordability, and improved quality of broadband in Africa, where download speeds rose from 2.68 Mbps in 2019 to 8.18 Mbps in 2022, accompanied by a significant drop in the average price of 1 gigabyte from 10.5% of monthly Gross National Income (GNI) per capita in 2019 to 5% in 2021.

The latest development in CSquared’s journey involves a $25m equity raise from CPDIF, the IFC, and the International Development Association’s (IDA) Private Sector Window Blended Finance Facility. This marks the first tranche of a broader $65m investment programme aimed at fuelling CSquared’s expansion and growth initiatives. In tandem with this injection of funds, CPDIF acquires the stake previously held by Google LLC, streamlining CSquared’s ownership structure.

The fresh investment is earmarked for network expansion, underscoring CSquared’s commitment to advancing digital infrastructure across Africa. The developmental impact of such investments is pivotal to CSquared’s vision, aligning with broader goals of job creation, innovation, and entrepreneurship, propelled by increased internet access and digitalisation.

Lanre Kolade, CSquared Group Chief Executive Officer, expresses unwavering optimism about the company’s role in addressing Africa’s digital transformation challenge. He emphasises CSquared’s proven track record in developing carrier-neutral, open-access networks, and the pivotal role investors play in transforming the company’s ability to deliver on its ambition of a Digitally Connected Africa.

Ngcaba highlights the strategic timing of increasing investment in CSquared amidst a pivotal phase in African digital development. The dual impact of developmental growth and commercial returns underscores the attractiveness of this investment for CPDIF.

Sarvesh Suri, the IFC’s Regional Industry Director for Infrastructure in Africa, emphasises the critical role of broadband connectivity in the continent’s development. The investment in CSquared aligns with the IFC’s strategy to promote digital infrastructure, fostering economic growth and job creation.

FTI Capital Advisors DIFC Limited played a crucial role in advising CSquared on the capital raise and concurrent sale of Google LLC’s stake, adding a layer of financial expertise to the strategic manoeuvre.

As CSquared forges ahead, the infusion of capital and streamlined ownership structure signal a new chapter in Africa’s digital evolution. The company stands poised to bridge the digital gap, fostering a continent where connectivity is not just a luxury, but a transformative force for progress and development. The vision of a Digitally Connected Africa inches closer to reality, fuelled by strategic investments and unwavering commitment. Now, more than ever, the future is here.

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