Saudi Arabia’s second-largest telecom operator Mobily said Monday it has established a joint venture with Silicon Valley-based Plug and Play Tech Center to make investments in seed-stage startups in the Middle East.
The partnership, the second of its kind in the region, will also help bring international startups to the region and comes just a few days after Mobily announced it has a launched a venture capital arm to invest in tech and media startups.
To mark the launch, the company revealed that it has invested in two companies: Anghami – a Spotify-like music mobile app that allows users to listen and download Arabic and Western songs; and EasyTaxi – an app similar to Uber that lets users book a taxi to come to their location.
Mobily Ventures director Daniel dos Reis told The Wall Street Journal that it took them almost two years to build the team and internal infrastructure of the fund inside the telecom company before they could launch. He admitted that it took a long time, but said they didn’t want to make an announcement before making any investment.
“There is a lot of talk and talk is cheap. We wanted to have something solid. We want people to believe that Mobily is really doing investment. So it took time to make the investment then build the website,” he said.
Mr. dos Reis said the JV with Plug and Play will focus on seed-stage startups and take local entrepreneurs to Silicon Valley for training, while Mobily Ventures will do early stage Series A investments ranging from $300,000 up to $3 million. In May, Plug and Play tied up with Jordan-based telco Umniah to launch a chapter in Amman. The accelerator said it would invest a minimum of $25,000 in pre-seed funding in regional tech startups for 10% of the business.
Rocket Internet-backed EasyTaxi received a $2 million investment from Mobily, having already raised $7 million in the region from iMENA Holdings, an investment firm partnering with Abu Dhabi-based telco Etisalat.
Founded about two years ago, Lebanon-based Anghami has 2.5 million active users on its app, with 25% of those in Saudi Arabia. Mobily will launch mobile phone plans with a paid-for version of Anghami as part of the packages.
Telecoms companies in the Middle East are increasingly investing in local startups and partnering with companies such as Rocket Internet in order to gain access to the brightest ideas and stay relevant in a tech-driven and mobile savvy market.
Etisalat has already partnered with iMENA, while Saudi Telecom Co., via its Dubai-based subsidiary Intigral, is affiliated to startups in an accelerator called Afkar.me. Doha-based Ooredoo has also teamed up with Rocket Internet to invest in tech companies in Asia Pacific.
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(via WSJ Blogs)