Kuwait’s Zain (KSE:ZAIN) has made its third venture capital investment this year after agreeing to inject an undisclosed amount into the Digital East Fund managed by VC firm Earlybird.
The fund focuses on digital start-ups in Central and Eastern…
Kuwait’s Zain (KSE:ZAIN) has made its third venture capital investment this year after agreeing to inject an undisclosed amount into the Digital East Fund managed by VC firm Earlybird.
The fund focuses on digital start-ups in Central and Eastern Europe, as well as Turkey, with Zain CEO Scott Geggenheimer saying he saw significant growth potential for digital companies in these regions.
Other investors in the Digital East Fund – which was established in 2013 and has raised US$150m to date – include IFC and the EBRD, along with entrepreneurs and prominent families in the region.
Earlybird partner Evren Ucok said: “The convergent ICT space is vibrant, and we are pleased to work with forward-looking telcos such as Zain that embrace the evolving telecom ecosystem.”
Ucok said the fund represented a strategic opportunity for Zain “to expand its area of exposure in terms of both services and geographic reach”.
He added that the cooperation would be complementary for the Digital East Fund and portfolio companies, “many of which have Zain’s geography and business areas on their strategic road map.”
Zain made its first foray in venture capital in April through a strategic anchor participation in Middle East Venture Partners’ latest fund. At the start of June Zain revealed it had participated in MENA-focused VC firm Wamda Capital’s growth stage funding round.
The investments followed on from the formation of a new digital-focused business unit Zain established last year to grow the operator “through new innovative business streams that add to Zain’s customer service offering”.
At the end of July Zain released a set of results which Geggenheimer was the first to say were disappointing. He blamed the continued instability and increasing competition in the Iraqi market for the poor numbers, but said he hoped the operator’s digital transformation would help provide new sources of revenue.
Zain is far from the only operator to embrace VC as telcos are looking for new ways to compete and innovate in the digital age.
Read TelecomFinance’s recent feature on telecoms operators investing in venture capital here.
