Safaricom, East Africa’s most profitable company, has disclosed a new plan to ramp up investment in seed-stage and growth stage startups in Kenya.
The company is looking to form a new venture company to invest in growth stage startups aligned to its business objectives, and to transform its existing Spark Fund to a company limited by guarantee to invest in more seed-stage startups.
According to Safaricom, the venture company would “accelerate Safaricom’s entry into new verticals in areas such as health, agriculture and education by unlocking value chain opportunities and driving innovation and value creation.”
Safaricom noted that expanding its investments to growth stage startups would enable it to expand its offering to customers across segments including financial services, consumer, enterprise and SMEs.
The telco noted that it would also allow the company to explore new business models as well as emerging technologies including machine learning, internet of things (IoT) and artificial intelligence (AI).
Since its inception in 2015, Spark Fund has been operated by an unincorporated trust known as Zindua Trust, with a board of trustees. Spark Fund has so far invested in startups including logistics firm Sendy and agri-tech iProcure.
The newly formed company will be a wholly owned subsidiary of Safaricom.
“The board recommends that the shareholders approve the incorporation of the said new subsidiary to invest in seed stage startups to support the development and growth of tech entrepreneurs and build reputation and trust within the tech community in Kenya,” the telco noted.
The proposals will feature at Safaricom’s upcoming Annual General Meeting (AGM). In the new arrangement, gains from Safaricom’s investment portfolio will be capitalized back into Safaricom PLC.