Digital Alpha Fund II closes on $1bn

Alessia Argentieri
23 April 2021

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US-headquartered digital infrastructure specialist Digital Alpha has held a final close for its Digital Alpha Fund II on its $1bn hard-cap.

With this new closing, the firm has reached total assets under management of more than $1.5bn.

The fund is larger than its predecessor, Digital Alpha Fund I, which was raised in 2017. Noticeable investments made by the fund include Norwegian cloud infrastructure developer Working Group Two; British cloud provider UKcloud; and US-based cloud-native software developer JetStream.

Digital Alpha's team is led by founder and managing partner Rick Shrotri and partner Vasa Babic.

"The strong interest we have had from existing and new institutional investors globally is testament to our team's expertise, the quality of our strategic relationships and our proven track record of value creation," said Shrotri. "We have already deployed a significant amount of capital."

Digital Alpha focuses on private equity investments in the digital economy, including "smart cities", broadband networks, enterprise data management and digital communication. The firm is headquartered in Henderson, US, with offices in San Francisco and London.

Digital Alpha has a strategic partnership with technology conglomerate Cisco, which includes preferred access to Cisco's dealflow, engineering and sales resources, as well as access to the company's ecosystem of channel partners and resellers. In addition, Digital Alpha plans to cultivate strategic partnerships with other Silicon Valley technology businesses.

Investors
LPs in the fund include sovereign wealth funds, pension funds, endowments, foundations, consultants and health platforms, primarily from North America, Europe and the Middle East. The fund achieved a re-up rate of almost 100% from Fund I.

Investments
Digital Alpha Fund II invests in digital assets, with a special focus on three verticals: next-gen networks (5G infrastructure investment and Wi-Fi 6); cloud computing; and Internet-of-Things-enabled "smart cities".

The fund will seek to build a diverse portfolio of approximately 12 companies with resilient business models and yield-orientated revenue share structures. It will target opportunities across North America and Europe.

To date, the fund has committed approximately $300m across three deals, including $185m for network access provider WeLink Communications to help expand their fixed-wireless broadband footprint across the US. More recently, the fund deployed $100m in Sharecare, a digital health platform.

People
Digital Alpha – Rick Shrotri (managing partner); Vasa Babic (partner).