Emerging market-focused telecom giant MTN, has acquired a 33.3 percent stake in African Internet Holding (AIH), a leading internet business group co-founded by German ecommerce conglomerate Rocket Internet, and Tigo’s parent company Millicom International Cellular.
Although financial details remain undisclosed, the deal, which cuts the co-founders’ controlling stakes down to 33.3 percent each, will see MTN “develop” and “accelerate the growth” of AIH, Millicom President and CEO, Hans-Holger Albrecht said.
Prominent subsidiaries under AIH include Nigerian online retailer Jumia, which has raised over $50 million in investment; South African leading e-retailer Zando; and Hellofood.
MTN said in an official statement that its investment in AIH is in line with strategy to bring digital services to customers, and that it will continue to pursue digital business adjacencies as one of its “key strategic priorities” to drive growth and value.
“We are excited to engage in a strategic partnership with Rocket Internet and Millicom to develop online ventures across the fast growing internet markets of Africa,” Sifiso Dabengwa, MTN Group President and CEO, said.
MTN, the telecom leader in Nigeria and South Africa, the largest markets for AIH currently, has a combined Africa mobile customer base of more than 220 million with Millicom, according to Millicom President and CEO, Hans-Holger Albrecht.
The formidable capacity of the partnering companies “will allow the partnership to capture the growth potential of the digital media space across our footprint in the region,” MTN’s CEO added.
Widespread internet penetration, especially mobile, in Africa, coupled with the increasing growth of its middle class has spurred the experimentation of heavy investments on e-commerce with more to come.
The investment is subject to regulatory approval, and the transaction is expected to close during the second quarter of 2014.
Founded in 2012 as a joint venture between Rocket Internet and Millicom International Cellular, AIH is a leading internet group in Africa, with presence in 13 countries on the continent, including South Africa, Nigeria, Egypt, Morocco, Cote d’Ivoire and Ghana. The company has developed several successful e-commerce ventures in the last 18 months, including Jumia, Zando, Kaymu, Jovago, Lamudi, Carmudi, Easytaxi and Hellofood.