2014 sees significant investment, acquisitions in mobile phone sector

Daily News Egypt
4 Min Read
Mobile phone companies are currently working on developing their services and increasing their efficiency to meet the growing customer service needs of the market. (AFP Photo)
Investments injected into the telecommunications and IT sector will be directed toward mobile applications during the coming phase, Yehia Thawrat, CEO of Link Egypt says. (AFP Photo)
Investments injected into the telecommunications and IT sector will be directed toward mobile applications during the coming phase, Yehia Thawrat, CEO of Link Egypt says.
(AFP Photo)

By Mohamed Alaa Eldin

It seems that 2014 was the year of investment in mobile applications: the sector witnessed significant investments as well as a number of mobile application acquisitions, most notably Facebook’s acquisition of WhatsApp. More recently, Truecaller was purchased in an investment worth $60m.

Investments injected into the telecommunications and IT sector will be directed toward mobile applications during the coming phase, according Yehia Thawrat, CEO of Link Egypt. Thawrat referenced growth rates for smart phone usage and a subsequent increase in mobile application usage which will create a broad customer base during a short time if the application satisfies the clients’ needs. WhatsApp serves as an example of this phenomenon, as it has greatly facilitated communication among users.

The number of users and their usage rates are the main determinants for attracting investments, according to Thawrat. The higher the usage rates and the number of customers, the more the market value of the application increases.

Sawari Ventures Chairman Ahmed el-Alfi agrees with Thawrat’s opinion, noting that the majority of investment funds currently concentrate on mobile application as they represent a leading source of growth in light of increasing numbers of smart-phone users and a constant need for applications that meet their needs. He added that the Egyptian market is one of the promising in this respect, as smart-phones do not account for more than 30% of total mobile users.

A majority of start-up companies now rely on providing services in the context of mobile applications, according to Bkam founder Mahmoud Abdel Fattah. Abdel Fattah pointed to the launch of his application that compares prices provided by bkam.com. The application was able to attract investments from Jabbar Internet Group, he said, explaining that the company is seeking a new round of investments over the next two months, a request supported by an increase in demand for the application.

2014 witnessed many mobile application investment deals, perhaps the most well-known of which was Facebook’s acquisition of WhatsApp earlier this year in a deal that cost $19bn. According to the deal, the founders of WhatsApp received $4.5bn in addition to a share of Facebook’s capital estimated at 6.6%.

Additionally, the Easy Taxi application, a product of Germany-based Rocket Internet, received a $40m investment from Phenomenon Ventures and Tengelmann Ventures.

Two weeks ago the Truecaller application was able to reap $60m worth of investments from Atomico, Sequoia Capital, and Kleiner Perkins Caufield Byers. According to an earlier statement made by Truecaller, the third round of investments will be aimed at strengthening developments for the application and hiring new talent so that the company may expand its global reach.

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