Safaricom has announced the approval of two new subsidiaries to invest in seed-stage and growth-stage start-ups in the country. The decision was made at the company’s 15th Annual General Meeting (AGM) held on Friday, July 28, 2023.
The new subsidiaries are a company limited by guarantee, which will focus on investing in early-stage start-ups that align with Safaricom’s strategic mission of becoming a purpose-led technology company by 2025, and a private limited liability company, which will invest in mature and strategically aligned entities that will help accelerate Safaricom’s entry into new customer segments and business models.
The company limited by guarantee will build on the success of the Spark Fund, an investment entity by Safaricom PLC that has supported several seed-stage start-ups across Kenya, such as Shupavu 291, iProcure, Sendy, Ajua, and Soko Fresh. The private limited liability company will act as the main investment vehicle for all strategic investments undertaken by Safaricom PLC.
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.”
Ndegwa added that the new companies will look for opportunities in emerging technologies such as analytics, machine learning, artificial intelligence, and the internet of things. He said that the company will be launching the call for applications for the seed-stage start-ups in the coming weeks.
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.
Despite facing tough operating conditions due to 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, Safaricom managed to maintain its market leadership and profitability in the past year. 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.