Over the past decade or so, Nigeria's technology ecosystem, and especially its tech startup ecosystem, has experienced what can only be described as phenomenal growth. From the number of new startups born out of the West Afrikan country to their expansion across Afrika and the world, Nigeria's tech startups have consistently been attracting venture capital.
Not only are they attracting investors but the country has also seen numerous accelerators and tech hubs open during the same period.
![Startups Business Nigeria Tomi Otudeko Itanna Honeywell Group](/content/images/2018/08/Tomi.jpg) Tomi Otudeko, Head of Sustainability and Innovation at Honeywell Group and Director of Itanna.
One such startup accelerator is Itanna, which was recently launched by one of Nigeria's leading corporate businesses, Honeywell Group. At the time of launching Itanna, Honeywell Group stated that it will also be the company's vehicle for investments into tech startups in Nigeria.
To understand more on why the Honeywell Group decided to start its own startup accelerator in Lagos, I caught up with Tomi Otudeko, Head of Sustainability and Innovation at Honeywell Group and Director of Itanna. Otudeko also shared thoughts on Nigeria's tech startup ecosystem in general.
iAfrikan: Firstly, for those readers not familiar with the Honeywell Group, could you give us a brief summary of what the company does?
Tomi Otudeko: Honeywell Group is a Nigerian conglomerate founded in the early 1970s. Honeywell is diversified, with business operations across key sectors of the Nigerian economy, including: Foods & Agro-Allied, Real Estate, Infrastructure, Energy and Services. The Group has built a solid track record of successfully establishing thriving, world-class companies, which are market leaders in their respective sectors.
How does starting the Itanna startup accelerator fit in with Honeywell's strategy and business?
Itanna is part of Honeywell Group’s strategy to ensure we create a lasting legacy to entrust to generations to come; which is hinged on our mission of using enterprise to make our world better.
We know that technology is key to securing the future of any business and with Itanna, we are identifying businesses that we believe will disrupt our existing portfolio and also look for businesses that are at the frontier of enterprise in new industries.
As stated, we truly believe that enterprise can have a huge impact in our world and Itanna fits directly into our strategy and mission by allowing us to support businesses that we believe will transform the industries they are in and the society as a whole.
What motivated the birth of Itanna?
For us at Honeywell Group, Itanna was the next logical step. As a Group with many “traditional” businesses, we had been thinking about the future of our businesses and how we ensure we are sustainable for generations to come. When the opportunity to create Itanna came about, it was clear that investing in and helping to develop the businesses of the future was not an option but a key imperative for the Group.
Will the accelerator only accept digital/technology startups?
Our focus is tech or tech-enabled businesses, so we are not looking for purely technology startups but startups that have used technology to disrupt the sector they are in. We believe that for businesses to be sustainable they must be solving real problems and we are excited to partner with any business that is disruptive and targeting the Afrikan Market, with worldwide potential that can make a great economic and social impact.
Each of our first cohort is using technology to change industry they are in, from Tradebuza who are using technology to enhance commodity trading by helping aggregators and outgrowing schemes to Powercube who are developing technology to give homes and businesses access to cheaper, clean energy. The other two companies in our initial cohort KoloPay andAccounteer are both using technology as a way to enhance existing business models by changing target-based savings and accounting respectively.
As part of the accelerator, will Honeywell invest in, acquire, or work to integrate the startups into their supply chain?
Once a company is part of the accelerator, they become part of the Honeywell Group family. As part of the accelerator, we take a small stake in the business and it is our interest to help them succeed and leverage on our network and existing infrastructure to help them grow. As the businesses develop, we will continue to support as stakeholders and may provide follow on investment. Corporate decisions would continue to be driven by the company's founders and shareholders and a decision to integrate or sell will be driven by the businesses and only taken if it is mutually beneficial.
What would you say is the state of technology/digital startups in Nigeria in 2018?
There is a lot of engagement in technology startups in Nigeria and it is truly an exciting time to be part of the ecosystem. While we are new to the space, the potential we see was a key reason we decided to engage at this time. The Nigerian ecosystem currently has a lot of interest from investors especially in Fintech Startups; in the second Quarter of 2018 alone, Fintech investments accounted for 75% of the total funding raised, although we are beginning to see a growing interest in other sectors like AgriTech and EduTech. However, participation by local funding institutions is still relatively low when compared with foreign investment, which is why we at Itanna want to help fill the local funding gap and be able to provide patient local capital from investors who know and have built businesses in the market.
Cover image credit: Tomi Otudeko, Head of Sustainability and Innovation at Honeywell Group and Director of Itanna.