Safaricom Considers Venture Companies in its Acquisitions Push.
Safaricom, the leading telecommunications company in Kenya, plans to establish two venture capital firms in order to invest in promising tech startups and support its future growth. The company has requested approval from its shareholders during the upcoming annual general meeting to set up these firms. One company will focus on investing in seed-stage startups to foster the development of technology entrepreneurs, while the other will target growth-stage startups for financial returns aligned with Safaricom’s strategic mission.
This operational shift marks a departure from Safaricom’s existing ‘Spark Fund’ grant program, which was launched in 2015 to support seed-stage startups but has not yielded tangible returns. The proposed companies will be wholly-owned subsidiaries of Safaricom and are expected to enhance administrative and governance processes.
By investing in startups at different stages of growth, Safaricom aims to leverage its financial strength and extensive networks to capitalize on innovative ideas that may otherwise struggle to secure funding. Kenya’s startup ecosystem is known for its vibrancy and has been recognized as one of the most progressive in Africa, trailing only South Africa and Nigeria in the global startup ecosystem index.
Opinion: Safaricom’s plan to establish venture capital firms demonstrates its commitment to fostering innovation and supporting the growth of the technology sector in Kenya. By investing in both seed-stage and growth-stage startups, Safaricom can provide crucial funding and resources to early-stage entrepreneurs while also seeking financial returns from more mature startups. This approach not only contributes to the overall development of the startup ecosystem but also positions Safaricom as an active player in the innovation landscape. Through strategic investments, Safaricom can further diversify its revenue streams, strengthen its market position, and contribute to the economic growth of Kenya.