Safaricom (NSE: SCOM) shareholders have approved two new subsidiaries, one dedicated to investing in seed-stage and another on growth-stage start-ups.
These significant developments, approved at Safaricom’s 15th Annual General Meeting (AGM), represent a momentous step towards supporting tech entrepreneurs, fostering innovation, and fortifying Safaricom’s role as a key enabler of the Kenyan tech community.
The incorporation of a company limited by guarantee to invest in seed stage startups, builds on the Spark Fund—an investment entity by Safaricom PLC governed by a Board of Trustees—designed to empower, and nurture seed-stage start-ups across Kenya. This new entity is expected to streamline administrative processes and enhance governance.
The Spark Fund portfolio companies include Shupavu 291 by Eneza education, which focuses on mobile-web learning for primary and secondary school students; iProcure, which provides an agricultural supply chain platform in rural Africa; Sendy, a tech company that builds fulfilment infrastructure for e-commerce and consumer brands. Africa’s first Integrated Customer Experience company, Ajua and Soko Fresh who provide access to cold chain infrastructure that extends the shelf life of produce for Digifarm farmers.
On the other hand, the new private limited liability company will be mandated to; invest in mature, strategically aligned entities that will help accelerate Safaricom’s mission towards becoming a tech company by 2025. This entity will also act as the main investment vehicle for all strategic investments undertaken by Safaricom PLC.
Mr Peter Ndegwa, Safaricom CEO, said: “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. Incorporating these subsidiaries is pivotal to realising Safaricom’s purpose to become a purpose-led technology company.”
Mr Ndegwa added the new companies will accelerate the business’ entry into new customer segments within the consumer, financial services, enterprises, and SME space and will “help unlock new business models and value chain opportunities.”
He added: “We will be looking to invest in and support early-stage companies especially in emerging technologies such as analytics, Machine Learning, Artificial Intelligence, and the Internet of Things. We will be launching the call for applications in the coming weeks.”
Mr Adil Khawaja, Chairman of the Board said: “We thank our shareholders for their unwavering support in establishing the new subsidiaries. By investing in tech entrepreneurs and initiatives that align with our strategic mission, we aim to continue to transform lives by connecting people, opportunities, and information while driving innovation, creating value, and leaving a lasting impact on society.”
At the AGM, shareholders also approved a final dividend of KES 0.62 per ordinary share with the dividend payout amounting to KES 24.84 billion. In February 2023, the Board approved a payment of an interim dividend of KES 0.58 per ordinary share, amounting to a total of KES 23.24 billion for our shareholders. This brings 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. 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.
This past year, the business navigated tough operating conditions, including increased regulatory scrutiny, changes in taxation policies, political uncertainty surrounding the elections, and a significant economic slowdown compounded by rising inflation, currency depreciation, drought, and famine. The revised Mobile Termination Rate (MTR) and increased excise duty on SIM cards and mobile phones added further pressure to the business. However, despite these obstacles, Safaricom exhibited resilience during the year to sustain an overall solid performance.
“Our performance in the year demonstrated the strong commitment to delivering value for our stakeholders including employees, customers, shareholders, and the community,” said Mr. Ndegwa, Safaricom CEO.
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