Safaricom cleared to invest in startups

Safaricom shareholders have approved the telco’s proposal to invest in new and growing startups in the technology space through two new subsidiaries that it will create.

Safaricom, in a statement, said the approval was obtained during its 15th annual general meeting (AGM) held on Friday, noting that the development will represent the telco with the opportunity to fortify its role as a key enabler of the country’s tech community.

This will now allow the company to buy into seed-stage and growth-stage startups at a time when a funding drought has seen dozens of startups close up in Kenya.

“We are committed to empowering the tech ecosystem in Kenya and beyond, and this strategic move will enable us to broaden our investments, embracing both seed-stage and growth-stage start-ups,” said Safaricom CEO Peter Ndegwa.

“Incorporating these subsidiaries is pivotal to realising Safaricom’s purpose to become a purpose-led technology company.”

The telco had earlier in the month published a proposal seeking to incorporate two subsidiaries or repurpose existing ones to invest in startups and initiatives that would support the growth and development of tech entrepreneurs for a financial return.

With the approval, the incorporation of the two special-purpose companies will mark an operational shift from the already-running ‘Spark Fund’ grant that Safaricom unveiled in 2015 to boost the growth of seed-stage startups in the country.

The financial muscle and expansive networks of the telco are set to come in handy to enable it to grow its scope and reap from innovative ideas that would otherwise have never seen the light of day owing to funding limitations of the small-time founders.

The Friday AGM also approved the proposed final dividend of Sh0.62 per ordinary share, with the total payout amounting to Sh24.8 billion.

“The dividend will be payable on or about 31 August 2023 to the shareholders on the register of members as at close of business 28 July 2023,” said the firm.

Safaricom posted a 22.2 percent decline in net profit for the full year ended March 2023 to stand at Sh52.48 billion, down from the Sh67.49 booked in the previous year.

kmwangi@ke.nationmedia.com