The African Economic Revolution Fund (AERF) and Nigerian conglomerate, Honeywell Group, have joined forces to create Itanna, an accelerator for African startups that aims to provide the expertise, market connections, institutional knowledge, and capital required to enable innovative teams and startups to build great businesses.
In the partnership, AERF offers the services of a varied range of professionals including investment bankers, private equity professionals, lawyers, and tech experts while Honeywell Group, with forty-five years experience of doing business across multiple industries in Nigeria, will provide its organizational and institutional knowledge.
In an interview with Techpoint, Tomi Otudeko, the Head of innovation and sustainability at Honeywell Group said, “we’ve run businesses, made mistakes and had successes. The fact that we are entrepreneurs ourselves will enable us to give startups the tools needed to structure their businesses for not just the capital, but for long-term growth.”
News of this new venture comes off the backdrop of one of Africa’s high points in the global tech sector when Facebook founder, Mark Zuckerberg and Google CEO, Sundar Pichai visited the continent in 2016 and 2017 respectively, after which they both pledged investments in various forms and have since made good on their promises.
Mark Zuckerberg, through his Chan Zuckerberg initiative, has invested $24 million into Andela, a Lagos based startup that trains software developers. Facebook has also announced it will launch an incubator program this year, in partnership with Lagos-based Co-Creation Hub which aims to develop tech startups and train 50,000 Nigerians in digital skills.
Google is said to open its first Google Launchpad space outside the United States in Lagos. A Google Launchpad Start event, a one-week boot camp for early stage startups, was held in November 2017.
More than ever, there are more opportunities for funding available for tech entrepreneurs in Africa, especially Nigeria. This might be because of the recognition that Africa could be the next internet hotspot, and a shift of the tech center of Africa from Nairobi to Lagos. In 2016, Quartz reported that businesses in Lagos received more startup funding than anywhere else in Africa.
According to the Disrupt Africa’s 2017 startup funding report, “African tech startups raised funding in excess of $195 million in 2017, up fifty percent from 2016, (and the highest ever, since Disrupt Africa started making the reports) with the number of startups securing funding also increasing to 159.”
Initially, African startups had to look outside the continent, especially to Silicon Valley for any meaningful funding.
In 2017, Flutterwave, a Lagos-based financial technology platform raised over $10 million in a series A funding round. Greycroft Partners and Green Visor led the new funding round with existing investor Y Combinator and new investors like Glynn Capital.
Paystack, another fintech platform based in Lagos, raised $1.3 million in funding from Tencent, Comcast Ventures, and Singularity Investments, with participation from other groups.
This is one of the main issues that Itanna is trying to target. Olivier Frendo, the co-founder of AERF said that “looking at some of the capital-raising success stories in Africa, Jumia, for instance, never went to Silicon Valley. They raised half a billion dollars in capital from their base here in Lagos. Also, look at IHS, they raised a few billion dollars, again from their initial Lagos base over a period of seven years.”
“We intend on giving African entrepreneurs the ability to raise capital from Lagos as opposed to having to go to Silicon Valley.”