South African mobile group MTN and technology investment firm Amadeus Capital have announced plans to invest US$40m (about R650m) in Travelstart, an online travel agency focused on Africa.
Travelstart, which was founded in Sweden in 1999, has built a strong presence in South Africa, Nigeria, Egypt, Kenya and parts of the Middle East.
“The growth investment by Amadeus and MTN will allow Travelstart to enter new markets and extend its market dominance throughout Africa, as the online travel agency responds to strong demand from a rapidly expanding middle class with Internet access,” MTN said in a statement.
Founded by CEO Stephan Ekbergh, Travelstart has operated from headquarters in Cape Town for the past 10 years and claims to have more than 75% market share in South Africa and market leadership positions in Nigeria, Egypt and Kenya.
It reported revenues of over $200m (R3,2bn) in 2015.
“The investment by Amadeus and MTN will support the expansion of Travelstart into other key markets, as well as the growth of its product offering,” MTN said.
The mobile operator, which has operations in 22 markets in Africa and the Middle East, will help support Travelstart’s expansion.
It has not been disclosed what stakes Amadeus and MTN are taking in Travelstart. However, MTN has revealed that it was Amadeus that led the investment.
Ekbergh said the Amadeus Capital investment comes at an “inflexion point” for Travelstart. There is a boom in online travel bookings across Africa, he said, with air travel in Africa expected to grow significantly faster than in most regions globally.
Amadeus partner Andrea Traversone said: “Our investment in Travelstart is among the largest venture investments in South Africa in the last five years.
“Africa has one of the fastest growing middle classes in the world that are fast adopting e-commerce and mobile Internet access. These macro trends support Travelstart’s growth and bode well for their strategic relationship with MTN.”
MTN group chief digital officer Herman Singh said the deal “complements” the operator’s investments in online and e-commerce in retail, marketplaces, classifieds and travel. — (c) 2016 NewsCentral Media
