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Tech Venture Capital firm 4Di Capital today announced that Convergence Partners will join as the newest investor in its 4Di Capital Fund 1, as an equal limited partner alongside Reinet Fund S.C.A., F.I.S., and E. Oppenheimer & Son.
4Di Capital has made seven investments in South African ventures so far, and in 2012 announced its first profitable exit of mobile community startup Motribe Networks to Mxit, the largest social network in Africa. The addition of Convergence’s investment to that made by the Oppenheimer family two years ago significantly increases the size of the Fund, enabling 4Di to expand into further new investments while also having more capital available to accelerate the growth of its current portfolio.
“We are delighted to welcome the addition of Convergence Partners to our investor base. We both believe in the opportunity offered by the emerging South African technology startup ecosystem,” says Justin Stanford, a founding partner of 4Di Capital.
He reckons that 4Di can “leverage” the seasoned experience of such investors with the firms approach to fostering entrepreneurial growth in South Africa. He sees the investment as a “vote of confidence from a leading local investor comes” in the tech VC space. It’s no secret that for VCs, raising capital for tech firms is seriously challenging, especially in Africa where technology is still viewed with some level of apprehension.
As a result of the investment, 4Di Capital’s assets under management will double, as the firm will also take over Convergence Partners’ current portfolio of technology venture investments in the form of Integrat, Bloodhound Technologies and Skillpod Media.
Convergence has in the past focused on tech investments so investing in 4Di makes sense for the firm. The company’s investments have played across the full spectrum from smaller early stage companies through to large multinationals and infrastructure projects.
The company’s focus is moving from just South Africa to a more pan-African view with the launch of the Convergence Partners Communications Infrastructure Fund.
“Our focus has increasingly been shifting to big-ticket pan-African ICT investments that accelerate digital access and development across the continent. The partnership with 4Di will allow us to channel our efforts through experienced experts who will also take over management of our existing VC interests,” said Brandon Doyle, CEO of Convergence Partners.
“We have spent many years assessing the global VC environment and have built a deep understanding of the ecosystem and key players involved,” Andile Ngcaba, Chairman of Convergence Partners, added.
“We were thus looking for partners who have themselves started up successful early stage tech ventures and, importantly, who have built a strong bridge into the global VC market, particularly in the US We believe this transaction aligns us with an experienced and passionate management team as well as other investors who support South African technology innovation.”