International Finance Corporation (IFC) and African tech-focused private equity firm Solcon Capital (earlier Convergence Partners Investments) are coming together to set up a co-investment platform that will look to invest in deep-tech businesses across India and South Africa.
IFC, the private-sector investment arm of the World Bank Group, and Solcon Capital will co-invest in companies across domains such as 5G, artificial intelligence (AI), internet of things (IoT), Big Data, and cybersecurity, the two said in a statement.
The two investors didn’t share any financial details, saying only that the value available for funding “will depend on each company and the investment required.”
“This strategic partnership is aimed at identifying and nurturing investment opportunities in the deep tech sector within India and South Africa, with the goal of propelling the digital economy in these burgeoning markets,” the two said. “The agreement entails that both Solcon Capital and IFC would work together for co-investment opportunities globally, but mainly focused on India and South Africa,” they added.
IFC and Solcon said that they are considering a bunch of companies in India and South Africa for investments but did not proffer any more details. They, however, said that they will consider companies that are looking for growth capital and are cash-flow-positive.
“Solcon Capital has a presence in both South Africa and India. It is deeply connected with the tech ecosystem and hence it uses its network to identify credible companies which can be in its prospective pipeline,” they added.
Sarvesh Suri, IFC’s regional industry director for infrastructure and natural resources in Africa, said the two organisations will leverage their combined strengths to make “a lasting impact” by fostering innovation and growth in the deep-tech sectors in South Africa and India, in the context of IFC expanding its scope into infratech globally.
The two-decade-old Solcon Capital was set up as Convergence Partners Investments in 2003 by Andile Ngcaba. The PE firm rebranded to Solcon Capital in June last year.
Solcon Capital was the first vehicle structured as a permanent capital vehicle in the Convergence Partners stable.
While rebranding itself, Solcon had said it would focus on international deep-tech investments in generative AI and Large Language Models (LLM), synthetic data and Big Data, cybersecurity, and quantum computing across South Africa, India, and Southeast Asia.
As part of the rebranding, Solcon also announced the appointment of Pramod Venkatesh as chief executive officer in August 2023. Before joining Solcon, Venkatesh was the Group CTO of inq., where he was responsible for building products and solutions around AI, Software-Defined Networking and Edge Computing.
IFC is already one of the backers of Solcon. It was one among a clutch of international financial institutions that had come together to back the Convergence Partners Digital Infrastructure Fund (CPDIF) when the fund hit its first close in July 2021. Launched in June 2020, the fund hit its second close in early 2023, garnering commitments of $296 million. Apart from IFC, the fund was also backed by investors such as British International Investment, the US International Development Finance Corp, DEG, FMO and Proparco.
Before CPDIF, the PE firm raised two other funds—Convergence Partners Investments and Convergence Partners Communications Infrastructure Fund. Convergence Partners began operating in 2006 and has invested in submarine cable systems, geostationary satellites, data centres, wireless networks and enterprise connectivity, fintech and health-tech services, among other things.
