Why investing in start-ups accelerates the innovation of mobile operators in emerging markets

Why investing in start-ups accelerates the innovation of mobile operators in emerging markets

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Why investing in start-ups accelerates the innovation of mobile operators in emerging markets

New report launched today at the GSMA Mobile 360 Series – Middle East conference outlines why more and more mobile operators are turning to start-ups to fuel their investments

18th October, Dubai: Corporate Venture Capital (CVC) investments have more than tripled in the last five years as more and more mobile operators invest in start-ups to aid their acceleration. That was just one of the findings of a new report launched today at the GSMA Mobile 360 Series – Middle East conference in Dubai, which outlines the motivations to pursue start-up investments in developing countries.

The report entitled ‘Corporate venture capital: an opportunity for mobile operators and start-ups in emerging markets’ highlights how the phenomenal rise in CVC investments now accounts for over 30 per cent of all venture investments, which has risen by 10 per cent from 2012. 

Developed by leading advisory and investment company Delta Partners with the GSMA, the report also charts the huge impact that the digital revolution is having on the telecoms sector. With the blurring of the boundaries between traditional telecoms and media, mobile operators are now realising that collaborations with technology start-ups are essential if they want to grow and remain competitive in a world where digital disruption dominates.

Whilst these ongoing efforts have often been concentrated in developed markets, the findings show that mobile operators in emerging markets are now set to catch up: “The new digital era has raised the bar and it’s vital that mobile operators in emerging markets take advantage of the opportunities represented by working with start-ups,” commented Nuno Goncalves Pedro, Partner at Delta Partners who co-authored the report.

“We believe that mobile operators in emerging markets would benefit from active support of the start-up ecosystem, in particular those start-ups that are local to them. To play more actively in the investment arena not only creates commercial benefits for those involved, but also, from a socio-economic perspective, it can have a number of positive outcomes such as increasing employment, boosting the quality of the local labour force and ultimately fuelling local ecosystems.”

The study outlines how these benefits are already being reaped by certain companies who have made successful collaborations in this space. For example, digital players such as Jumia (founded by Rocket Internet) based in Africa, have been highly successful in soliciting investments from the mobile operators such as Millicom, MTN and more recently Orange.

Ultimately, this injection of cash funding has also helped drive Jumia’s business forward with collaborations around joint marketing, cross-promotion and selling.

Goncalves concludes: “With the expansion of investments from the developed world into emerging markets, it’s clear to see that economies are catching up. Mobile operators have a great set of tools at their disposal, which will also see them gain from partnerships with start-ups to evolve their business models.”


Notes to editors:
Information on the GSMA Ecosystem Accelerator: The programme focuses on bridging the gap between mobile operators and start-ups, enabling strong partnerships that foster the growth of innovative mobile products and services. These partnerships bring impactful mobile solutions to the people and places that need them most, generating the greatest socio-economic impact. In particular, the programme operates an Innovation Fund which supports African and Asian start-ups with direct funding, technical assistance, and connections with mobile operators. The programme is funded by the UK Department for International Development (DFID) and supported by the GSMA and its members. Learn more at www.gsma.com/ecosystemaccelerator or contact us at accelerator@gsma.com.

Press contacts: Cheryl King / Yusuf Stapic
Email: deltapartners@markettiers.com
Tel: +971 (0)55 941 8449

Delta Partners is a leading advisory and investment integrated platform globally. We are a unique hub for people, capital and knowledge to address challenges and opportunities in a transforming TMD industry. With offices across the world, in the United Arab Emirates, South Africa, Spain, Singapore, Colombia and the United States of America, we serve our clients in developed and in emerging markets. Our unique business model enables us to serve our TMD clients through our three business lines, Management Consulting, Corporate Finance and Private Equity.