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SoftBank has partnered with Saudi Arabia’s sovereign wealth fund and plans to expand into the Middle East and Africa.
SoftBank Group Corporation invested in a company in Saudi Arabia for the first time, and cooperated with a division of the Kingdom’s sovereign wealth fund to lead a financing of US$125 million for Unifonic, a customer communication platform.
Unifonic co-founder and CEO Ahmed Hamdan said in an interview that the proceeds will be used to fund growth in the Middle East and expansion into Asia and Africa. He said the company will also consider acquisitions in these areas to help it expand faster.
The Unifonic transaction is funded by SoftBank’s Vision Fund 2. Following the $415 million raised in July by Dubai cloud kitchen startup Kitopi, this is SoftBank’s first business in the United Arab Emirates and has brought the company’s valuation to more than 10%. One hundred million U.S. dollars. Last month, it also co-led a round of financing for Turkish e-commerce company Trendyol.
As SoftBank enters the Middle East, there are more and more so-called unicorn companies worth at least $1 billion. More investors from outside hope to bet on the transformation of online services that lag behind other regions.
Dubai-based public transportation solutions provider Swvl said in July that it expects to be listed on the Nasdaq together with the special purpose acquisition company Queen’s Gambit Growth Capital, with an implied equity value of approximately US$1.5 billion.
Unifonic provides cloud-based software to send automatic messages. As the pandemic spreads, companies turn to these services to send one-time passwords to customers or ship updates. The company processed 10 billion transactions last year, charging a small fee for each message sent to customers.
Hamdan declined to comment on the latest valuation, but said the company expects sales this year to exceed 100 million U.S. dollars and will begin planning to list on global exchanges in the next three years.
“Being able to attract one of the top international funds to invest in Saudi Arabia is an important milestone, and it will encourage more foreign direct investment into the digital and technological fields,” Hamdan said. “We will optimize listing on the global market that can provide the best valuation.”
STV, Sanabir
Unifonic was founded in 2006 by Ahmed and his brother Hassan Hamdan. The first ten years were mainly self-funded. It raised US$21 million in 2018, led by STV, a US$500 million venture fund established by Saudi Telecom.
Sanabil is a division of the Saudi Arabian Public Investment Fund and an investor in the company. As we all know, the wealth fund PIF invested $45 billion in the first Vision Fund, which supports many of the largest technology startups, including Uber Technologies Inc., Opendoor Technologies Inc. and DoorDash Inc..
“In the next five years, we have seen business grow tenfold,” Hamdan said. “So we can handle 100 billion transactions, affect 400 million people, and possibly work with 50,000 companies.”
Since the pandemic forced more transactions to move online, the valuation of Twilio Inc., which operates a similar business and is listed on the New York Stock Exchange, has more than tripled to nearly $60 billion.
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