SoftBank Ventures into Saudi Arabia in Wealth Fund Deal | Economy and Business News

SoftBank has partnered with the sovereign wealth fund of Saudi Arabia and plans to expand to the Middle East and Africa.

SoftBank Group Corp. has made its first investment in a Saudi-based company, partnering with a unit of the kingdom’s sovereign wealth fund to lead a $ 125 million financing for the Unifonic customer communication platform.

The proceeds will be used to finance growth in the Middle East and expansion in Asia and Africa, Unifonic co-founder and CEO Ahmed Hamdan said in an interview. The company will also consider acquisitions in those regions to help it expand faster, he said.

The Unifonic deal is funded through SoftBank’s Vision Fund 2, and follows the July 415 million fundraiser by Dubai-based cloud kitchens startup Kitopi, which was the first of SoftBank in a business based in the United Arab Emirates and brought that company’s valuation to more than $ 1 billion. Last month, he also co-led a funding round for Turkish e-commerce company Trendyol.

SoftBank’s foray into the Middle East comes with a growing number of so-called unicorn deals worth at least $ 1 billion. More foreign investors are looking to bet on a shift to online services that has lagged behind in other regions.

Swvl, a Dubai-based mass transit solutions provider, said in July that it expects to be listed on Nasdaq in combination with special-purpose acquisition company Queen’s Gambit Growth Capital, with an implied equity value of around $ 1.5 billion. .

Unifonic provides cloud-based software for sending automated messages. As the pandemic spread, companies turned to these services to send one-time passwords or push updates to customers. The company processed 10 billion transactions last year, charging a small fee for each message it sends to customers.

Hamdan declined to comment on the latest valuation, but said the company forecasts sales for the year of more than $ 100 million and will begin planning a global stock listing in the next three years.

“Being able to attract one of the major international funds to invest in Saudi Arabia is a huge milestone that will encourage more foreign direct investment to enter the digital and technology space,” said Hamdan. “We will optimize to list on a global market that can provide the best valuation.”

STV, Sanabil

Founded by Ahmed and his brother Hassan Hamdan in 2006, Unifonic was largely self-financing during the first decade. It raised $ 21 million in 2018 led by STV, a $ 500 million venture fund established by Saudi Telecom Co.

Sanabil, a unit of the Saudi Arabia Public Investment Fund, was also an investor in the company. The PIF, as the wealth fund is known, invested $ 45 billion in the first Vision Fund, which supported many of the largest tech startups, including Uber Technologies Inc., Opendoor Technologies Inc., and DoorDash Inc.

“Over the next five years, we see the business grow tenfold,” Hamdan said. “Then we could process 100 billion transactions, impact 400 million people and potentially be working with 50,000 companies.”

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 since the pandemic forced more transactions to move online.

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