Three mavericks who started South Africa’s largest data centre company

South Africa’s biggest data centre company Teraco was formed by three serial entrepreneurs and telecoms veterans — Abraham van der Merwe, Joe Botha, and Matthew Tagg.

The first of the trio to get into the telecoms industry was Tagg, who launched Webafrica as a website hosting company in 1997. At the time, South Africa’s Internet industry was just getting off its feet.

Tagg used income from the business to support himself while studing for a BSc degree in Computer Science at the University of Cape Town, which he completed in 2002.

In 2003, he relaunched Webafrica with Rupert Bryant, the company’s second full-time employee. The revamp came with the addition of ADSL products.

Webafrica acquired Frogfoot’s consumer-focused services in 2007, long before the company became one of South Africa’s biggest fibre network operators.

Frogfoot was founded by Botha and Van der Merwe, in the same year that they graduated from Stellenbosch University. Like Tagg, Van der Merwe also studied computer science, while Botha studied industrial engineering.

Frogfoot was initially an Internet service provider (ISP) focused on small and medium enterprises.

However, the business would not be able to support both its founders full-time. In its early years, Van der Merwe took up a day job at 2d3D, which provided consultancy services to companies like IBM and Intel.

In 2003, Botha and Van der Merwe co-founded fixed-wireless network infrastructure provider Amobia Communications.

The same year in which Webafrica bought out Frogfoot’s consumer business, Tagg teamed up with Botha and Van der Merwe to start up Teraco.

The company was the first vendor-neutral co-location provider in South Africa and launched an Internet peering point called hub.org.za.

On his LinkedIn profile, Botha recalls UUNet denying IOL the ability to set up peering connections at their data centre while he was working as a senior developer at the online news publication.

Van der Merwe said he designed Teraco’s first data centre, financial model, and business plan and played a key role in securing its first three rounds of investment.

According to his LinkedIn profile, Tagg was personally involved in the initial ideation, technical and business planning, and seed funding.

In 2008, Teraco was handed over to an experienced management team led by Tim Parsonson and Lex van Wyk.

Van der Merwe resigned from the board in order to give the company its full independence and to free up time to pursue other opportunities.

Tagg remained on the Teraco board as a non-executive director until 2010.

He stepped down as Webafrica CEO in 2011, leaving behind one of South Africa’s largest ISPs for web hosting and broadband, before moving to Silicon Valley in the US to pursue his startup dreams in 2012.

Botha also departed Teraco in 2009 and founded several other companies, including what would be another major FNO.

Parsonson was Teraco’s first group CEO until 2013, while Van Wyk initially served as co-CFO before taking over from Parsonson until 2019, when he stepped down.

Both played a major role in making Teraco South Africa’s biggest data centre company.

Teraco helped slash broadband prices in South Africa

Teraco launched the NAPAfrica Internet exchange point in 2012, a pivotal moment in South Africa’s broadband development.

NAPAfrica provided free network peering and convinced many of the world’s biggest content owners like Google, Facebook, and Netflix to peer their platforms and services locally.

That resulted in bandwidth costs plummeting to nearly zero, making uncapped Internet services much cheaper.

Internet traffic flowing through NAPAfrica has surged substantially over the past few years. At launch, traffic was recorded at 532Mbps.

The number of companies peering at the exchange has increased radically over the past 13 years — to more than 652, according to NAPAfrica’s latest update.

In March 2020, it hit a milestone of 1Tbps traffic, 1,884 times higher than at the beginning. That had increased to 2Tbps by July 2021.

In February 2023, traffic surpassed 3Tbps. By early 2025, it regularly exceeded 4Tbps. On 20 and 21 February 2024, the exchange recorded over 5Tbps of traffic.

As a testament to Teraco’s success, it was acquired by San Francisco-based real estate investment trust Digital Realty for $3.5 billion (R56 billion, at the time) in 2022.

The company has eight data centres in three locations — Johannesburg, Cape Town, and Durban — with a combined critical power load of 186MW.

It plans to add another 40MW hyperscale data centre at its Isando campus in Johannesburg — which will be called JB7 — by 2026.

Continuing entrepreneurial endeavours

While the three original Teraco musketeers are no longer involved with the company, they went on to found several more telecoms and tech firms and are still involved in these industries today.

Botha co-founded personal information exchanging platform Trustfabric in 2010, followed by cashless events payment system Gust in 2012.

In 2015, he co-founded Octotel, where he served as chief technology officer until 2019. He is currently CTO at ISP Atomic Access, which he co-founded in 2022.

Van der Merwe founded end-to-end renewable energy provider Stage Zero, which specialises in solar rentals for households and commercial customers.

Botha and Van der Merwe have also served on various industry representative associations — such as the Internet Service Providers Association and Wireless Access Service Providers Association.

Van der Merwe was Frogfoot CEO for nearly 23 years before handing over the reins to Shane Corley in April 2023. He continues to serve as a board director.

Two years after moving to the US, Tagg co-founded Palo Alto-based Paperjet, a form-filling and document-signing company.

He is currently working at cross-platform publication NewCo Shift.

The company produces a forum where executive leaders bring together founders, innovators, and CEOs from fast-growing startups, Fortune 500 leaders, and experts in policy and regulation to discuss navigating rapid technological changes.

Below are photos of some of Teraco’s data centres.