MTN is teaming up with Africa's fast-growing online travel agency, Travelstart, as the telecoms giant looks for more opportunities in e-commerce.
Global technology investor, Amadeus, will invest $40 million (R640 million) in Travelstart in partnership with MTN.
Travelstart claims to be the leading online travel agency in Africa, recording revenue of over $200 million in 2015. In South Africa, Travelstart has over 75% market share and has also built a market leadership position in Nigeria, Egypt, Kenya and parts of the Middle East, it says.
"MTN's vision is to lead the delivery of a bold new digital world, and this investment in partnership with Amadeus is a key step on a multi-year journey to achieve that promise," according to MTN group chief digital officer, Herman Singh.
The growth investment by Amadeus and MTN will enable 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.
Singh says the deal with Travelstart strongly complements MTN's existing investments in online and e-commerce in retail, marketplaces, classifieds and travel. Travelstart expects the strategic partnership to support its expansion through MTN's mobile network in Africa. MTN has around 233 million subscribers in 22 countries in Africa, Asia and the Middle East.
Amadeus partner, Andrea Traversone, says the capital injection into 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. With this transaction, Amadeus has demonstrated its commitment to strong investment opportunities such as Travelstart that respond to these trends in emerging markets," adds Traversone.
"Amadeus Capital's investment comes at an inflexion point for Travelstart, as we capitalise on a boom in online travel bookings across Africa and Middle East. Air travel in Africa is expected to grow significantly faster than in most regions globally, with a host of low cost carriers targeting the region," says Travelstart founder and CEO, Stephan Ekbergh.
"Africa alone is a $50 billion travel market growing between 3% and 5% annually. The investment from Amadeus Capital and the MTN partnership is a fantastic fit for our company as we share the same ideology and long-term commitment," adds Ekbergh.
Travelstart was founded in Sweden in 1999 by Ekbergh and has been operating in Africa from its Cape Town headquarters since 2006. Travelstart's African businesses were spun off in 2010 to focus on the emerging market opportunity, where it has been growing profitably since.
The business gives users real-time access to thousands of flights from all carriers and serves two million monthly users in 16 countries. Travelstart employs over 200 people, with 150 of its staff operating out of Cape Town.
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