Bulls n Bears Entrepreneurship Zone :: Matching deals on the African continent

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Orbitt is an Africa-focused digital deal origination and processing
platform. It provides investors with tailored investment opportunities and
helps African companies get matched to the right type of funding. Chipo
Muwowo, a freelance journalist, recently sat down with Lanre Oloniniyi
(co-founder) and Ahanna Anaba (transactions analyst) to learn more about the
business.


Tell me more about Orbitt.


LO: Will Hunnam, my co-founder, and I come from a background of originating
deals across Africa. We worked with investors seeking opportunities across
the continent and helped introduce African companies to global investors. As
many investment advisors on the continent would know, there are certain
challenges to this model of deal origination. After a number of years, we
began to ask ourselves a few fundamental questions: “Why is there a
structural mismatch in capital allocation across Africa?” “How can we reduce
the time and cost of deal origination?” “How can we reduce the friction
points within the typical transaction cycle?” It was this line of thinking
that led to the idea behind Orbitt and the reason why we think it has value
in the African ecosystem. We believe Orbitt can solve many of the challenges
faced by global investors seeking investment opportunities in Africa.


Was your previous work with established private equity funds?


LO: It was with UK-based family offices. Prior to that, I worked in finance
and mergers and acquisitions in the oil and gas sector. And before that,
Will and I managed a portfolio of companies on behalf of a family office
that invested capital across Africa, mostly in mining and oil and gas. We
came across a lot of friction points in our work and saw the need for a tech
solution having sourced a lot of interesting opportunities that didn’t fit
the investment mandates of our investors due to geography or sector
misalignment. That’s the underlying thesis of why we designed Orbitt and how
the platform is already helping to address some of the challenges of
originating and doing deals in Africa.


What’s your business model?


LO: As it stands, we originate investment opportunities and receive a
transaction fee when the investment is made by the matched investor. But
that’s a stop-gap. Longer term, we will be introducing a subscription model.


What is Orbitt’s geographical footprint? Are you just in London or do you
have offices in Africa too?


AA: We’re in London, but because of the nature of what we do as a tech
company, we cover Africa and the global markets where our 450-strong
investor base are located. We have deals coming in from all over the
continent and we have partnerships with strategic financial services
intermediaries across Africa’s key business centres. On top of that, we
travel back and forth to the continent, while being in touch with our
current and prospective users on a day-to-day basis.

LO: And we’re here in London for several reasons. Mainly because a
significant number of our platform investors are based here or have
representative offices in European cities. London is also one of the most
vibrant fintech hubs in the world. That said we are currently exploring
setting up offices on the African continent to increase our reach – either
in Mauritius or South Africa. The Orbitt value proposition is an African
solution and we are one of the only pan-African fintech companies out there.
A lot of companies in the African fintech space are in very interesting
verticals that are often confined to individual markets or regions. We have
users from Cape Town to Cairo, Lagos to Nairobi, and everywhere else in
between.


When people sign up to your platform, what can they expect?


AA: There are three different account types on the Orbitt platform. First
is the investor; these are typically institutional funds looking for
companies to invest in. Second is the intermediary; this includes corporate,
legal and other investment services providers. Lastly there is the
fundraiser; a business owner trying to raise funds for his/her own company
or a CEO/CFO raising capital for the company they work for.

The platform is not an open marketplace where you can log in and see all
the active transactions. We’ve designed it in such a way to prevent
investors seeing opportunities until they put up a mandate. Even then, they
are only shown deals that match their investment criteria. If an investor
puts up a mandate saying they are looking for agriculture deals in South
Africa, for example, their mandate will say ‘South Africa, Agri deals’ and
the approximate amount of money they are looking to deploy. A matched
investment opportunity will appear with high-level information such as the
amount of capital the investee is looking to raise and what type of capital
they are looking for. If the investor is interested, they will request more
information through the platform. Both parties can then start sharing
information having already agreed to a standard Orbitt NDA when registering
on the platform. This makes the process significantly faster and we’ve
managed to make the platform secure and private so that people feel a lot
more comfortable with that.

LO: This is one of the other nuances of what we’ve developed in terms of
focusing on the African market. Whilst there are quite a lot of other tech
platforms facilitating transactions, a lot of them operate in quite an open
marketplace manner. We know that this wouldn’t work in Africa because of the
high value placed in confidentiality and proprietary deal flows at the
moment.


How do you vet the people signing up to the site?


AA: Before we approve our platform users, we talk them through what the
platform is, what we actually do, and how we can help. Our aim is not
necessarily just volume; we want valuable users. We pride ourselves on being
able to put up deals which are ‘investor-ready’. That said, we are
approached by the occasional company owner who has a good idea of how to
position their capital raise but may require additional services such as a
debt guarantee. This is where our relationships with investment
intermediaries come in. We refer advisors to company owners to help them
package the opportunity into an ‘investor-ready’ format. Subsequently, when
the opportunities are ‘investor-ready’, we fully onboard them onto the
platform and help them find investors.


Typically, who is signing up to the platform?


AA: At the moment, the majority of our users are intermediaries (45%).
Investors account for about 30-35%, and the rest are company owners.


In terms of regions, where are you seeing the most deal action from?


AA: I would say it’s split between West, Southern and East Africa. Country
specific: Our top five countries are Kenya, Mozambique, Zambia, Nigeria and
Ghana.

LO: In addition, we’re seeing a lot of activity coming from North Africa
with a growing number of interesting deals in Morocco and a strong user-pool
in Tunisia and Egypt. In the SADC region we have some good agriculture,
hospitality and logistics opportunities in Mozambique and Zambia. We also
have a lot of new users interested in the technology, mostly coming out of
East Africa where the investment community are tech-friendly and don’t feel
the need to meet before they share information and deals. For us, this
attitude is very important in terms of our overall vision of digitising the
African investment ecosystem. We’re constantly on the lookout for partners
and collaborators to achieve this.


You’re obviously capturing quite a lot of data which provides opportunities
for new ventures. Do you have any idea what direction you might take?


LO: Invariably, we are always re-imagining how Orbitt will morph into a
data resource. But predictive data and analytics will be the standout
value-add in the future. A high percentage of the reports produced in the
African investment ecosystem focus on historical information – they’re
backward looking. But because of the nature of what we’re capturing – key
data on investment demand, supply and interaction – we will be able to
predict certain indicators such as investor demand per region, specific
country transaction volume, and what type of capital will grow fastest.


How are you measuring the success of Orbitt?


LO: Due to the nature of being a multi-sided platform and a first-mover in
our space, proof of concept is very important. Having validated this through
successfully matching deals, we’re now looking at two core KPIs: User
growth, which continues to be over 15% month-on-month, and investor
engagement, which is currently hovering around the 85% mark. This means that
the quality of deals is high and over four of every five opportunities we
show our investors elicit interest.


What impact do you feel Orbitt will have on the industry as a whole?


LO: We believe in efficient capital allocation and that matching companies
to the right type of growth capital builds resilient economies which, in
turn, creates employment. A robust business environment is crucial for the
African continent and that’s how we see our contribution to Africa’s
economic development. On an investor level, our goal is to transform the way
transactions take place. We don’t want to replace traditional deal making
but rather enhance the whole investment process to increase FDI into African
companies and drive economic growth across the continent.


Obviously there are many exciting opportunities ahead, but are there
specific threats to the business that you can already foresee?


LO: I think the obvious threats will be the ‘grown up’ platforms out there
coming to the African market. But like every threat, we see it more as an
opportunity. Instead of starting from scratch like them, it’ll be a
potential value-add for us. – Howwemadeitinafrica 



Orbitt founders Will Hunnam (left) and Lanre Oloniniyi (right)

 

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