South Africa-based Convergence Partners (CP) said the investment (2-page / 81 KB PDF) by the Convergence Partners Communications Infrastructure Fund (CPCIF) was the fund’s first investment in West Africa.
VGN, founded in 2011, is a holding company for a group of financial technology enterprises. The group has five offices across Nigeria, more than 200 employees and comprises firms “focused on developing technology solutions for institutions in the education, power, aviation, downstream oil and gas, financial services and cyber security sectors”, CP said.
VGN recently announced the signing of a contract by its downstream oil and gas focused firm Fueltech and Nigerian-based Oando Plc for the deployment of ‘SmartStations’ at Oando’s major filling stations to provide automated, cash-free ‘e-fuelling’ payment services.
CP is an investment management firm founded in 2006 to focus on Africa’s telecoms, media and technology sectors. The company said its new equity capital invested in VGN will enable the group to “accelerate its growth plans domestically in Nigeria and across the West African region”.
CP chief executive officer Brandon Doyle said: “Innovative financial technology is a key component of the African development story, as it enhances efficiency and governance, and enables service provision to the broader population. VGN is a very exciting investment opportunity for us.”
The close of the CPCIF, with capital of more than $200m, was announced last month. CP chairman Andile Ngcaba said then: “We believe the current fund size is well suited to the scale of infrastructure investment opportunities we are seeing across the continent... Access to quality ICT infrastructure is a catalyst for more competitive and efficient business operations and provides new business models for traditional industries.”
Other African infrastructure projects supported by CP include Seacom, the privately-funded firm that laid an undersea broadband cable system along the eastern and southern African coastlines, in which CP has a 12.5% stake.
Nigeria’s broadband fibre optic network is considered a priority as the country looks to public-private partnerships (PPP) to expand the country’s existing telecoms infrastructure capacity to meet international standards, according to a report published earlier this year.
The National Integrated Infrastructure Master Plan, approved by Nigeria’s Federal Executive Council, said an estimated $325 billion is needed to expand ICT infrastructure. The amount reportedly represents around 11% of the target for total infrastructure investment over the next 30 years.
A joint report published in 2012 by the World Bank and African Development Bank, with support from the African Union, said that, at the start of 2012, Africa’s mobile telephony market was “bigger than either the EU or the US. Some 68,000 kilometres of submarine cable and over 615,000 km of “national backbone networks” had already been laid to boost connectivity across the continent, the report said.
