Earlier this month we reported that Safaricom was looking into establishing two venture capital firms as part of its strategic approach to investing in promising tech start-ups and had sought shareholder approval to establish the two venture capital firms.
Well, during its 15th annual general meeting (AGM), Safaricom shareholders gave their nod of approval to the telco’s proposal to invest in new and growing startups in the technology space through the creation of two new subsidiaries.
This move is seen as an opportunity for Safaricom to strengthen its role as a key enabler of Kenya’s tech community and contribute to the growth and development of tech entrepreneurs in the country.
Safaricom’s Commitment to the Tech Ecosystem
The approval obtained during the AGM enables Safaricom to buy into both seed-stage and growth-stage startups. With a funding drought leading to the closure of many startups in Kenya, this strategic move comes at a crucial time to support and empower the tech ecosystem. Safaricom CEO Peter Ndegwa emphasized the company’s commitment to empowering the tech community and becoming a purpose-led technology company.
“Incorporating these subsidiaries is pivotal to realizing Safaricom’s purpose to become a purpose-led technology company,” said Ndegwa.
Operational Shift to Support Tech Entrepreneurs
Previously, Safaricom had launched the ‘Spark Fund‘ grant in 2015, aimed at boosting the growth of seed-stage startups in Kenya. However, the incorporation of the two special-purpose companies marks an operational shift, allowing Safaricom to expand its scope and leverage its financial strength and expansive networks to invest in innovative ideas and startups that face funding limitations.
Financial Returns and Empowering Innovators
By investing in startups and tech initiatives, Safaricom not only seeks financial returns but also aims to foster an environment where innovative ideas can thrive and contribute to the growth of the tech ecosystem. Through this move, Safaricom seeks to play a more significant role in supporting tech entrepreneurs and contributing to the overall development of the technology space in Kenya.
Dividend Approval and Financial Performance
During the AGM, shareholders also approved the proposed final dividend of Sh0.62 per ordinary share, amounting to a total payout of KSh24.8 billion. Safaricom posted a net profit decline of 22.2% for the full year ended March 2023, standing at KSh52.48 billion, compared to KSh67.49 billion in the previous year.
The approval to invest in tech startups through the creation of two new subsidiaries marks a significant milestone for Safaricom in its journey to empower the tech ecosystem in Kenya. By supporting both seed-stage and growth-stage startups, Safaricom aims to contribute to the growth and development of tech entrepreneurs, bridging the funding gap and fostering innovation in the country’s technology space.
As Safaricom continues to evolve as a purpose-led technology company, its financial strength and network resources are poised to play a pivotal role in shaping the future of the tech community in Kenya.