Tehran — MTN, the cellphone carrier with $1bn stuck in Iran, agreed to make an investment of €20m that will support Snapp.ir, the Iran’s first cab-hailing smartphone application.
The funds "will allow us to quickly expand to other cities" than Tehran, Snapp CEO Shahram Shahkar said by e-mail on Tuesday.
MTN will transfer the cash to the app’s owner, Iran Internet Group, which operates and invests in startup and e-commerce companies.
The cellphone carrier’s investment in Snapp strengthens its ties with Iran, as it tries to repatriate R15.4bn from the country, following the lifting of US-led economic sanctions.
MTN’s former chief financial officer, Brett Goschen, said in August that it would take at least five months for the carrier to transfer the money due to a lack of ties between Iran and international banks.
The shares fell 0.5% to R113.23 as of 9.14am in Johannesburg, extending the year’s decline to 15%.
MTN, Africa’s biggest mobile-phone company by sales, has invested in tech startups through the Middle Eastern Internet Group and Africa Internet Holdings. Both of those ventures are in partnership with Germany’s Rocket Internet, which is not involved in MTN’s investments in Iran.
MTN is a 49% stakeholder in a joint venture with Iran’s second-biggest telecommunications provider, IranCell. MTN has 22 markets across Africa and the Middle East.
Iran Internet Group owns e-commerce companies including Snapp, retailer Bamilo and food delivery service ZoodFood.
The taxi-hailing service has gained about 500,000 subscribers and a fleet of 10,000 drivers since it started two years ago as Iran’s answer to Uber, according to Shahkar.
The CEO declined to provide figures for Snapp’s revenue and profit, saying the company’s focus was on reinvesting to expand the business into other cities.