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investing

MTN ready to pour in $400m into Africa & Middle East startups

In an effort to bolster growth and improve on entrepreneurship in the Middle East, the MTN Group and Rocket Internet have announced a partnership. This is the second partnership announced between the giants this week.

Earlier, both companies signed a deal with Millicom International Cellular to develop internet businesses in Africa through Africa Internet Holding (AIH), with each party holding a
33.3% stake in AIH.

According to a statement, MTN and Rocket Internet will create a joint venture to develop ecommerce businesses in the Middle East, with MTN and Rocket as 50% shareholders in Middle East Internet Holding (MEIH).

Rocket Internet already has a presence in several Middle Eastern countries, and has rolled out a series of high-growth online businesses, including Easytaxi, Lamudi, Namshi and Hellofood.

“The agreement with Rocket marks yet another important milestone in our journey of pursuing digital business adjacencies as one of our key strategic priorities, to drive growth and value for our customers,” said Sifiso Dabengwa, MTN Group President and CEO.

The partnership brings together Rocket Internet’s expertise in developing successful global internet business models, and MTN’s leadership position and unique knowledge of the local telecom markets.

Rocket Internet’s co-founder, Oliver Samwer, seems quite happy with the deal stating that he is “confident that the strategic partnership between MTN and Rocket Internet is going to accelerate the online shift in the Middle East”.

“With joint forces, Middle East Internet Holding will develop its already existing ventures even better and will launch new companies even faster and more successfully.”

MTN expects to invest approximately US$400-million over the next two to four years into AIH and MEIH. The investments are subject to regulatory approval, and the two transactions are expected to close during the first and second quarter of 2014 respectively.

“Through MEIH, MTN and Rocket aim to accelerate and further develop the nascent e-commerce market in the Middle East region,” added Dabengwa.

Author Bio

Mich Atagana
Mich started out life wanting to be a theoretical physicist but soon realized that mathematics was required. So, she promptly let go of that dream. She then decided that law might be the best place for her talents, but with too many litigation classes missed in favour of feminist... More