Ministry of Telecom
launches ICT fund
MIC Ventures will invest
in technology and services
The Ministry of Telecommunication (MoT) launched MIC Ventures, a $48 million fund, to invest in and empower the ICT sector and related services startups.
Jamal El Jarrah, Minister of Telecommunications, said that MoT will not only offer financial support, but will provide a free technical laboratory. If more advanced technology is required, MoT will support the access to needed technologies through regional or international institutions. Jarrah said that the financed companies will get assistance to market their end-products.
Emre Gurkan, Chief Executive Officer at Touch, said that the two telecom operators Touch and Alfa will be providing $12 million annually, split equally between them, for a four-year period.
Khaled Zeidan, General Manager of MIC Ventures, said that the fund will help to build companies that will survive and create jobs. This will be acheived through investing in companies that forecast a positive cash flow and are able to survive the post-injection period and endure post-capital injection. Zeidan said that the selection process will reduce concern surrounding the absence of investment exits in the local market.
The fund will start with $100,000 in investment tickets and will reach $2 million. Zeidan said that the fund’s ownership within the startups should not exceed 49 percent, and that it will not seek majority shares.
An added value for all ICT startups will be the ability to access the networks and expertise of the two local telecom operators to empower their technical resources, said Zeidan.
The fund will consider, besides the ICT sector, companies within other service sectors that have growth potential. Zeidan said that these will include payment applications, online content, delivery and logistics, gaming, and possibly social media.
Gurkan said that Zain Group, the mother company of Touch, based in Kuwait, could be interested in the acquisition of certain products and startups, or could help develop them through incorporation or by receiving public financing through Initial Public Offerings (IPOs).
Date Posted: Feb 22, 2018