MTN invests in $75 million tech fund
MTN Group has been unveiled as the “cornerstone investor” in a $75 million fund aimed at late stage companies developing online and mobile applications and services.
Amadeus Capital Partners, the technology investor, held a First Close at $75 million on the Amadeus IV Digital Prosperity Fund – the first of its fourth generation of funds.
The fund will invest in late stage venture and growth companies, predominantly in mature markets, developing online and mobile applications and services targeted at the rapidly expanding middle classes in Africa, the Middle East, Asia and Latin America.
Further investment is anticipated from other institutional and corporate investors interested in the fund’s strategy, Amadeus said.
The investment firm already boast 20 portfolio companies with customers in Asia, Africa and Latin America, including Cambridge Broadband Networks, Edgeware, Celltick and ip.access.
Amadeus said it had begun to develop investment opportunities in online and mobile applications and services relevant to the needs of an emerging middle class of consumers, when they were approached by MTN.
“Amadeus and MTN worked together to refine an investment thesis focused on technologies that leap-frog desktop applications and services to those designed specifically for ‘mobile first’ and the technologies and platforms that underpin such services,” it said.
Amadeus said it has identified 19 developing countries, including South Africa, as target markets for innovative online and mobile services.
Additional countries include: Brazil, Chile, Colombia, Mexico, Uruguay, Russia, India, Indonesia, Kazakhstan, Turkey, Egypt, Thailand, Vietnam, Bangladesh, Georgia, Malaysia, Kenya, and Nigeria.
The wealthiest 20% of the population in these countries – excluding India – already comprises a market of over 300 million consumers. Wired Internet penetration, however, is still low (16% in Africa, 28% in Asia, 40% Middle East and 43% in Latin America); consequently, the connected device of choice is the mobile phone, Amadeus noted.
It said that the success of companies like Fundamo and Naspers in Africa, and GittiGidiyor in Turkey, underlines the scale of the opportunity to build and profitably exit online and mobile services businesses in such markets.
Karel Pienaar, group chief strategy and M&A officer of MTN, said: “This investment in Amadeus’ new Fund will give us exposure to a range of opportunities in online and mobile applications and services relevant to the needs of the emerging middle class of consumer.”
“Investment in companies that focus on those technologies that leap-frog current applications fits well with MTN’s focus of driving sustainable growth through data services and related opportunities,” he said.
Amadeus CEO Anne Glover said: “This fund builds on our sixteen years of experience in investing in the telecommunications market, but with a new focus on a key driver of technology adoption – mobile usage by the increasingly affluent segments of developing economies.”
“We are delighted to have found in MTN a corporate partner who is knowledgeable, well-connected and at the forefront of innovation in developing markets and we look forward to this partnership attracting the best entrepreneurs in the space, to create globally successful businesses,” Glover said.
Amadeus will constitute a Strategic Advisory Board comprising experts, including MTN executives, to assist portfolio companies in corporate strategy and in planning how to take their products to the market.
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