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Zain Ventures, the newly formed venture capital arm of Kuwait’s biggest telecoms provider Zain Group, closed its first two investments in Dubai-based mass transit and shared mobility services provider Swvl and US FinTech start-up Pipe.
“We are extremely excited and confident that Zain Ventures’ first investments in fast-growing and world-leading entities in their respective industries, Pipe and Swvl, will be value-accretive to all parties,” said Bader Al Kharafi, Zain’s group chief executive and vice chairman.
Zain Group operates in Kuwait, Bahrain, Iraq, Jordan, Saudi Arabia, Sudan and South Sudan. It provides mobile services to more than 49.8 million active customers, the company said at the end of September last year.
Boursa Kuwait-listed Zain Ventures will complement its existing investment portfolio and “open the door to future investment opportunities … focusing on digital innovations in the fast-growing electronic services and start-up ecosystem”, the company said.
It is investing in Swvl through a $100 million agreement that is part of the start-up’s recently announced blank-cheque company merger.
Founded in 2017, Swvl allows commuters to reserve seats on private buses operating on fixed routes and pay fares through its mobile app. The start-up, which applies an Uber-like concept to mass transit, currently operates in 10 cities in Egypt, Kenya, Pakistan, the UAE, Saudi Arabia and Jordan.
The Cairo-born company is set to go public through a special purpose acquisition company in the fourth quarter of this year. It will become the second technology start-up from the Middle East to list on the Nasdaq stock market and the first from the region to attain a value of $1.5 billion, Swvl said last week.
“The enormous and relatively untapped entrepreneurial talents of the region are being showcased to the start-up ecosystem global community through this transaction that will see Swvl as the first more-than $1bn unicorn from the Middle East to list on Nasdaq,” said Malek Hammoud, chief investment and digital transformation officer of Zain.
Zain Ventures’ second investment is in US FinTech Pipe, which enables technology companies to receive their revenue upfront by pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts.
Set up in June 2020, it raised $150m in a funding round earlier this year that valued the entity at $2bn. So far, more than 4,000 companies have signed up on its trading platform.
“Pipe is a start-up that is rewriting the rule book on FinTech development,” said Mr Hammoud. “We believe Pipe offers an incredible opportunity for capital appreciation and revenue growth and we look forward to participating in its continuing expansion as more clients are added to the platform.”
Saudi Telecom also has a $500m venture capital arm known as Saudi Technology Ventures that has backed various companies, including Careem, which was acquired by Uber, Tabby and Trukker.