Safaricom already has an funding arm, Spark Venture Fund, which has invested in a number of native startups. However, there are plans to open further packages that might complement the Fund.
Safaricom has revealed a plan to enter the venture capital recreation by establishing two new subsidiaries. These subsidiaries can be tasked with figuring out and investing in tech startups in Kenya. The telco hopes to inject capital into startups as a part of its subsequent progress frontier.
The institution of the new ventures is topic to shareholders’ approval on the annual common assembly that can be held earlier than the tip of July. TechCabal will report on the event of the assembly.
It is unclear whether or not the 2 funds will exchange Spark Venture Fund, a $1 million fund that invests in late-seed to early-growth stage tech startups in Kenya. However, TechCabal can report that the fund nonetheless exists, because it was talked about in the direction of the tip of 2022.
At that point, Safaricom’s chief enterprise improvement and technique officer, Michael Mutiga, reaffirmed the importance of the spark fund venture funding increase. The assembly introduced collectively the media and concerned an change with Safaricom CEO Peter Ndegwa. Mutiga’s assertion emphasised the potential impression of Safaricom’s fund on emergent, younger, and seed firms. He acknowledged the inherent danger concerned, recognising that some ventures would succeed whereas others wouldn’t. Mutiga expressed hope that by providing diligent help and leveraging their community, Safaricom might contribute to the success of those firms, each financially and in different areas.
The fund was launched in 2014 and has invested in a number of startups, together with Sendy, and Ajua, however acquired purposes from over 200 startups.
The fund goals to help the profitable improvement and progress of high-potential cell tech startups in Kenya. The fund gives funding, enterprise improvement help, and technical help to native and rising startups. The fund additionally takes benefit of the provider’s distinctive capabilities, belongings, and market positioning to assist its investees scale.
Dipping income
At the announcement of its end-year outcomes, Safaricom’s administration emphasised the significance of diversifying income streams to counter rising regulatory and operational prices. The telco additionally aimed to mitigate the decline in voice and messaging enterprise. Safaricom reported a web revenue of KES 52.4 billion ($370 million) for the complete 12 months ending March 2023, marking a 22.4% drop from final 12 months’s earnings of KES 67.4 billion ($476 million).
Its launch in Ethiopia was additionally costly after beginning operations in October 2022. The telco is claimed to have invested $800 million and acquired a mortgage of $400 million for its working license. The enterprise is projected to break even after 4 years.
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