[Interview] Tony Idugboe, Vice President, Itanna, Nigeria
Tony Idugboe is Vice President, Head of Investments at Itanna, an investment vehicle that drives and supports Nigeria's most promising tech-enabled startups through Honeywell Group's business acumen, investment and mentorship.
Could you introduce your company?
Itanna is a Corporate Venture Capital platform backed by the Honeywell Group. The platform is conceived to be a place where Africa’s top talent can bring their ideas, visions, expertise, and resources to create a new wave of businesses. At Itanna, we invest in early stage and growth stage technology enabled businesses across Sub Saharan Africa. We do this in two ways. The first is through an Accelerator Programme where selected investment companies receive both financial investment and hands-on advice from business experts to accelerate their business growth. The second way is through a Direct Investment scheme where we provide strategic investments to growth stage companies.
Why was Itanna created, and to what extent is it achieving its purpose?
Itanna is a core component of Honeywell Group’s innovation and sustainability strategy, and was created out of a recognition of the impact of technology on businesses. We just concluded our pilot cohort which was a huge success. The pilot cohort was very impactful to these startups, as they were able to validate their business models and strategy, grew their businesses by reaching more customers and increasing revenue. During the program these startups received training and mentorship in form of UI/UX Sessions, legal and HR workshops, classes on technology enhancements, business and marketing, and reviews of revenue/pricing model and operational metrics. During the course of the Programme, the startups had industry experts and entrepreneurs like Interswitch’s Mitchell Elegbe, TLCom’s Omobola Johnson and VGG’s Bunmi Akinyemiju, come share their success stories and lessons with them. Furthermore, several of these startups are currently having conversations with investors they met on Demo Day. We at Itanna are happy to see the impact we have made on these startups. I will also note that through Honeywell’s network, the accelerator’s inaugural cohort has secured eight partnerships which are expected to have positive impact on the startups’ top line.
How is Itanna funded?
Itanna is currently funded off Honeywell Group’s balance sheet. However, our future plan, once we have built a track record, is to seek other funding partners (both investors and corporate).
What criteria must a startup meet to merit support from Itanna?
For the Accelerator Programme, we have 2 sets of criteria – primary and secondary. Our primary criteria are public, while our secondary criteria are private. We view the secondary criteria as our secret sauce. Our primary criteria are:
· Pan-African Market Potential: Startups with potential to scale across multiple African countries.
· Strong Founding Team: Strong founding teams with a clear vision, technical capability, domain/sector knowledge, executional skills, and strong sense of integrity.
· MVP with traction: Startups with a Minimum Viable Product (MVP) that have been launched. Also, Startups should be able to show traction either in the form of user growth/adoption or partnerships.
For our Direct Investment Scheme, where we focus mainly on growth stage startups. We like to see startup companies with over 10% month-over-month growth, high lifetime value / customer acquisition cost (LTV/CAC) ratio, large target market, Pan-African market potential, and strong management teams.
What area most needs improvement in the Nigerian ICT startup sector?
There are 4 key areas we have identified, they are talent, funding, regulatory oversight and infrastructure improvement.
· One of the most difficult challenges ICT startups face in Nigeria is attracting and retaining talent. Most seasoned talents prefer to avoid the hassle of the startup life by working for larger corporations that can pay more for their services. The implication of this is that it is expensive for most ICT entrepreneurs to find good, quality talent that they can rely on to run their businesses. To improve this, the benefits of digital entrepreneurship needs to be taught in both our secondary and tertiary institutions.
· Despite recent efforts by the government, the regulatory environment remains challenging for Nigeria’s ICT startups. The regulatory framework for many tech startups is yet to catch up with the impact of technology in businesses. Regulators will need to get a better understanding of technology and create a framework that properly enables growth while continuing to protect all stakeholders.
· Funding is one of the major challenges inhibiting the growth of startups in Nigeria’s ICT sector, particularly seed and pre-series A funding. Honeywell is trying to solve this problem via Itanna. However, there need to be more players in the space providing support to early stage ICT startups via funding.
· The cost of doing business in Nigeria remains high due to lack of basic infrastructure such as power, good roads and the high cost of internet. We need to do more to improve on our existing infrastructures and create new ones.
What does Itanna need to grow and reach more startups needing support?
A key thing we need to do is expand our outreach outside of Lagos, Abuja and Port Harcourt. We plan to do this by partnering with other incubators and hubs outside these regions. Also, we want to broaden our Pan-African outreach to attract startups outside of Nigeria. Lastly, we want to source and invest in more growth stage companies via our direct investment scheme and plan to close our first direct investment before the end of the year.
What is the latest news from the company?
We recently held our first Demo Day (on the 30th of November) at our Enterprise Factory. The day saw our four pilot cohort startups (Accounteer, KoloPay, PowerCube, & TradeBuza) pitch to Honeywell Group’s extensive network of high net-worth investors for investment, corporate banking and strategic partnerships, for their companies. The Demo Day also hosted a panel of leading players in the Nigerian tech and business ecosystems, who discussed the role of corporate Nigeria in achieving win-win collaborations with tech startups. Panellists included Deji Oguntonade, Head Fintech & Innovation, Guaranty Trust Bank, Lola Ekugo, Head Digital Innovation Lab, First Bank, Obi Emetatom, Managing Director, Appzone and Seun Faluyi, Managing Director, Uraga Power Solutions.
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