IRAN, OCTOBER 12, 2016 – MTN Group Ltd., the South African wireless carrier with $1 billion stuck in Iran, agreed to make an investment of 20 million euros ($22 million) that will support Snapp.ir, the Islamic Republic’s first cab-hailing smartphone application.The funds “will allow us to quickly expand to other cities” than Tehran, Snapp Chief Executive Officer Shahram Shahkar said by e-mail on Tuesday. Johannesburg-based MTN will transfer the cash to the app’s owner, Iran Internet Group, which operates and invests in startup and e-commerce companies.
MTN’s investment in Snapp strengthens the phone company’s ties with Iran as it tries to repatriate 15.4 billion rand ($1.1 billion) from the country following the lifting of U.S.-led economic sanctions.
MTN’s former Chief Financial Officer, Brett Goschen, said in August that it will take at least five months for the carrier to transfer the money due to a lack of ties between the Republic and international banks.
The shares fell 0.5 percent to 113.23 rand as of 9:14 a.m. in Johannesburg, extending the year’s decline to 15 percent.
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 SE, which isn’t involved in MTN’s investments in Iran.
MTN is a 49 percent stakeholder in a joint venture with Iran’s second-biggest telecommunications provider, IranCell. That’s one of the South African company’s 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 Technologies Inc., 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.