Johannesburg - Fibre broadband provider Vumatel has received a R250m investment from African mezzanine fund manager Vantage Capital to further build out its network.
Vumatel first connected upmarket suburb Parkhurst in 2014 to fibre to the home internet, but the business has expanded to connect 22 suburbs in Johannesburg and Cape Town.
The facility from Vantage has been structured in two equal tranches of R125m so that it could be drawn by Vumatel upon achieving operational and financial milestones.
“Since concluding the transaction in April this year, Vumatel has rapidly expanded its network and has exceeded the milestones required to drawdown both tranches of the R250 million facility from Vantage,” said Vantage Capital in a press statement on Friday.
This investment boost comes after both Investec and Standard Bank have injected funds into Vumatel.
In April, Vumatel chief executive officer Niel Schoeman said that his business plans to invest R3bn over the next two years in South Africa.
The company has also targeted passing 100 000 homes with fibre broadband in South Africa.
“We look forward to our partnership with Standard Bank and Vantage Capital, who provides mezzanine financing, to create the networks that will contribute to national growth,” said Schoeman in April.
Luc Albinski, managing partner at Vantage Capital, said in a statement that “the provision of high-speed, quality broadband has been shown to have positive social and economic benefits for a country”.
The Vumatel deal is Vantage Capital’s 22nd mezzanine investment and the fourth investment in its Fund III, which is targeting a final close of R4bn and has a 40% allocation for South Africa.Other investments by Vantage Capital have included a $20m investment in Nigerian property group Landmark and an R80m investment in Namibian hospitality and property group UAG.