In its first direct investment foray into Africa, Amadeus Capital Partners, is leading a $40 million growth investment round in Travelstart, an online travel agency. The investment is being made through the London-based technology investor’s Amadeus IV Digital Prosperity Fund. As part of the deal, Andrea Traversone, a partner with Amadeus, will take up a board set on Travelstart’s board.
One of the fund’s cornerstone investors, mobile communications provider MTN Group, is also involved in the deal, sealing a strategic partnership with the Cape Town-headquartered company. Both capital and access to MTN’s mobile network across the continent will be used to support Travelstart’s expansion into new markets as well as consolidate its position in existing markets.
The company, which had revenues of $200 million in 2015, has a 75% share of South Africa’s market and has already established itself in Nigeria, Kenya, Egypt and parts of the Middle East. Founded in 1999 by Stephan Eckbergh in 1999, the company moved its headquarters to Cape Town in 2006, since when it has grown rapidly in response to strong consumer demand for travel from the continent’s expanding middle class.
“Africa has one of the fastest growing middle classes in the world that are fast adopting e-commerce and mobile internet access,” commented Andrea Traversone, the Amadeus partner who led the deal. “These macro trends support Travelstart’s growth and bode well for their strategic relationship with MTN.”
As well as supporting the firm’s expansion with its network, it’s hoped that the link up with MTN will provide Travelstart with other growth opportunities, according to Herman Singh, MTN’s Chief Digital Officer. In the statement announcing the deal he said the transaction “…strongly complements our existing investments in online and e-commerce…”.
“The MTN footprint, subscriber base, payment capability, network and brand awareness strongly underpin the synergies already being manifested in our other investments,” he continued. “We look forward to working with Amadeus and the TravelStart team to accelerate the business development of this adjacency.”
The deal is one of South Africa’s largest venture investments of the past 5 years. Travelstart provides travelers with real-time access to thousands of flights from all carriers and serves 2 million monthly users in 16 countries. In addition to its office in Cape Town, the company has offices in Dubai, Istanbul, Lagos, Cairo and Dar es Salaam.