Kenya’s Wananchi Group raises $130m for African expansion
By Tom Jackson, South Africa
Kenya’s Wananchi Group, which owns the Zuku pay-TV and fibre brands, has raised US$130 million in funding to expand in East and Southern Africa.
The investment was co-led by existing Wananchi shareholders Altice SA, Liberty Global, Emerging Capital Partners (“ECP”) and ATMT alongside new investors Helios Investment Partners.
“The new capital investment will be used to consolidate the group’s market leadership in East Africa and to extend our services across East and Southern Africa,” said Wananchi Group vice chairman Richard Bell.
“We will continue the deployment of fibre to the home networks in more cities in East Africa and extend our business services networks and product offerings across a wide variety of geographies and market segments. With our stronger balance sheet we will also invest in exciting new technologies and service platforms to improve the quality of our products and deliver a superior experience for our customers.”
Ali Mufuruki, chairman of the board of Wananchi, said: “This is a very exciting time for Wananchi. We have grown tremendously over the six years since we founded the business. The significant size of this investment round is further proof that the markets have confidence in our business strategy and our performance to date. There is no better time than now to invest in African markets and the transformation of the African consumer experience, of which Wananchi is at the forefront in East Africa.”
Recent figures from the Communications Authority of Kenya showed Wananchi Group’s market share in the fixed/wireless internet subscriptions market grew by 1.7 per cent between January and March this year, leaving them with 44.7 per cent and a market leading position. The company has launched or improved a number of services, improving its voice telephony services and launching Zuku TV in Malawi, as well as other channels in other countries.
In August Zuku began a US$2.5 million network upgrade in order to improve services as it expanded in East Africa, with the upgrade expected to be completed by the end of this month.
“Over the last two years we have had an unprecedented growth in our customer numbers, hence the need to provision more capacity in the network to accommodate the growth. This upgrade will ensure that we offer improved quality of service, to existing and new customers,” said Richard Alden, chief executive officer (CEO) of Wananchi Group.
“The work required to put the necessary infrastructure in place began earlier this year and is due to end in October. The upgrade will focus on increasing network access capacity for the end user; new voice architecture so as to provide cutting edge telephony services and increase national backbone capacity.”
Alykhan Nathoo, a partner at Helios, said: “Helios is excited to contribute to this latest growth capital financing for Wananchi. We have been extremely impressed with the significant successes Wananchi has accomplished to date, and look forward to working with the Wananchi team and its existing shareholders to achieve its growth goals.”