The two new Safaricom subsidiaries are poised to change investment landscape for local startups

local startups

Kenya has long been known as a tech-hub in Africa, but up until now, most of the investment in Kenyan tech startups has come from foreign investors. Local investors on the other hand have been shying away from supporting the local startups, citing risky ventures as the excuse (I wonder why the foreign investors do not get scared by the so called risky ventures).

I think the real reason local investors don’t want to invest in local startups is because they prefer to invest in more traditional sectors like real estate, agriculture, or manufacturing, where they feel more confident about making profits.

But things have are about to make about turn. Last week, Safaricom shareholders approved the creation of two new subsidiaries solely dedicated to investing in tech startups. The first subsidiary will focus on supporting early-stage startups which will provide resources and guidance to those at ideation or early implementation stages. Some of the companies that have already benefited from similar support from Safaricom include Shupavu 291, which focuses on mobile-web learning for students, and iProcure, which provides an agricultural supply chain platform.

The second subsidiary will invest in growth-stage startups to help them grow even faster. I suppose scaling the growth startups to local and international levels will be the main focus on this subsidiary. Safaricom has made the move to venture into startup investments so as to be more than just a profitable company; they want to be purposeful. By supporting local tech entrepreneurs and initiatives that align with their mission, they aim to drive innovation and create lasting impacts on society. This move by Safaricom comes at a time when the tech ecosystem in Kenya is thriving, with over 600 active tech startups.

This announcement comes at a time when Safaricom has also declared a final dividend of KES 0.62 per ordinary share for its shareholders, bringing the total dividend for the year to KES 48.08 billion which represents KES 1.20 per share in respect of the year ended 31 March 2023. This reflects Safaricom’s resilience and performance despite the tough operating conditions caused by the COVID-19 pandemic and other factors. Safaricom’s move to create two new subsidiaries for investing in tech startups is a game-changer for the Kenyan tech ecosystem. It will provide much-needed capital, mentorship, and market access for local entrepreneurs who are creating innovative solutions for the African market and beyond. It will also strengthen Safaricom’s position as a leading tech company that is not only profitable but also purposeful. We applaud Safaricom for this bold and visionary initiative, and we look forward to seeing the positive outcomes it will generate for Kenya’s tech sector and society at large.

Read: Interest free loans for up to Kshs 100K from Safaricom and Faraja are here ‚Äď but only for shopping

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