Safaricom plans to set up two venture capital firms as it seeks a bigger share of Kenya's tech start-ups to fuel its growth in the years ahead.
The giant telco targets to incorporate the new entities tasked with identifying and incubating start-ups and investing in scale-ups.
The establishment of the new subsidiaries is subject to shareholders' approval at the July 28 annual general meeting.
Safaricom wants to inject capital into seed-stage and growth-stage businesses as part of its next growth frontier.
“The incorporation of a company limited by guarantee to invest in seed stage start-ups to support the development and growth of technology entrepreneurs and build reputation and trust within the tech community in Kenya,” Safaricom says in its planned special business agenda for the AGM.
Seed-stage start-ups are those that are typically yet to begin generating revenue and require capital to enable them to begin executing their idea. Growth-stage businesses (scale-ups) are those that are already engaged in commercial activity and have revenues being generated even though they may still not be profitable.
“The incorporation of a private limited company (or alternatively repurposing of an existing subsidiary) to invest in growth stage start-ups (scale-ups) and initiatives that enable achievement of Safaricom Plc’s strategic mission for a financial return,” the firm says.