Orange’s $56m Africa fund signals new era for startup-operator relations

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The launch of a new early-stage investment programme in Africa by mobile operator Orange is a huge step forward in terms of relationships between telecoms and startups on the continent.

Disrupt Africa reported last week Orange announced the launch of an Africa-focused arm of its early-stage investment programme Orange Digital Ventures, committing EUR50 million (US$56 million) to the new initiative.

Orange Digital Ventures was launched in 2015 to identify and fund early-stage startups worldwide and provide strategic support, and Africa finally has a dedicated branch of the programme, which will focus on new connectivities, fintech, internet of things (IoT), energy and e-health.

African operators have been increasingly active with startups over the last few years. Kenyan giant Safaricom launched a US$1 million investment fund in 2014, and has backed a number of companies. Airtel ran the Catapult-a-Startup initiative, while held a Pan-African Entrepreneurship Challenge in partnership with Jumia in Cape Town.

Yet this Orange fund signals a giant step forward, not only because of its size but also the fact it means a global operator launching a fund specifically focused on Africa. Operators across the world are increasingly looking at startups, and this move should encourage more to take a look at the innovation going on in many African countries.

The fact that there are multiple pain points in the relationships between startups and operators is obvious, so much so that organisations as important as the GSMA have felt the need to release reports detailing how they can work together more efficiently. Major firms like Orange putting startups high on the agenda like this can only help that process.

Partnerships between operators and startups are a win-win situation for both, allowing operators to innovate more effectively and startups to reach bigger markets. It is also an important development given Africa’s funding shortage, and new arrivals on the investment scene are always welcome. Here’s hoping Orange’s upping of the stakes has the desired impact.

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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