SoftBank makes first Saudi deal together with Sanabil Investments

Proceeds will be used to fund growth in the Middle East and expansion into Asia and Africa, Unifonic co-founder and chief executive officer Ahmed Hamdan said in an interview. The company will also look at acquisitions in those regions to help it expand faster, he said.

The Unifonic deal is funded through SoftBank’s Vision Fund 2, and follows on from July’s $415m fundraising by Dubai-based cloud kitchen start-up Kitopi, which was SoftBank’s first in a business based in the United Arab Emirates and took that company’s valuation past $1 billion.

Last month, it also co-led a financing round for Turkish e-commerce company Trendyol.

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

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

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

Ahmed Hamdan, co-founder and chief executive officer of Unifonic.

Hamdan declined to comment on the latest valuation, but said the company is forecasting sales for the year of more than $100m and will start planning a listing on a global exchange in the next three years.

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

Sanabil

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

Sanabil, a financial investment company, was also an investor in the company. The PIF, as the wealth fund is known, put $45bn into the first Vision Fund, which backed many of the largest technology start-ups including Uber Technologies Inc., Opendoor Technologies Inc. and DoorDash Inc.

“Over the next five years, we see the business growing by 10 times,” Hamdan said. “So we could process 100bn transactions, impact 400m 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 almost $60bn since the pandemic forced more transactions to move online.