Q&A: Why this corporate is backing Nigerian fintech startups


Nigerian conglomerate Honeywell Group was founded in 1972, importing and marketing commodities such as baking yeast, stock fish, glass and steel rods.

Since then, the company has evolved into a diversified enterprise with businesses across major sectors of the Nigerian economy, namely foods and agro-allied, real estate, infrastructure, energy and services.

Not, then, a company you would immediately tip to get involved in Africa’s tech startup space. But yet, as reported by Disrupt Africa last month, Honeywell Group has partnered the African Economic Revolution Fund (AERF) to launch Itanna, a five-month, Lagos-based accelerator for fintech startups that offers up to US$100,000 in investment.

Disrupt Africa caught up with Tomi Otudeko, head of innovation and sustainability at Honeywell Group, to find out way the company was diversifying into fintech and what its hoped to gain from the launch of Itanna.

Disrupt Africa: What is behind Honeywell’s interest in fintech startups and the launch of Itanna?

Tomi Otudeko: Itanna is a core component of Honeywell Group’s innovation strategy and was borne out of a recognition of the impact of technology on businesses. We realised the need for us to invest in the future and could not ignore the wave of tech-led change in the business environment. Instead, our goal is to be a part of this change and make a meaningful contribution to the development of new businesses and new industries.

In line with our mission statement to “use enterprise to make our world better”, we are looking for innovative and disruptive businesses that are targeting the African market, with pan-African potential and great social impact. While our first programme is focused on fintech, subsequent cohorts will have different themes in line with the group’s innovation needs and strategy. Our innovation strategy is driven by innovation requirements derived from companies within the group, which are in various sectors in the economy.

We chose fintech as our first cohort as we believe that enabling access to finance and enhancing the quality of financial services through technology, would have a significant impact on our economy, as well as on our portfolio business. Given our network, we believe we are well positioned to help fintech startups build their businesses – by linking them to the right partners, providing them with potential distribution channels, sharing our business set-up and building experiences to help them establish sustainable and credible businesses.

Overall, we believe that if we find the right fintech startups, we will be well-positioned to achieve our three investment criteria: return on innovation, return on social impact and return on capital, as well as find the next African Unicorn.

DA: Why choose AERF as partners?

TO: The AERF founders have a unique track-record in helping African institutions raise capital; collectively they have raised close to US$100 billion. The team has a complementary set of skills and are made up of a former private equity professional, an investment banker, a lawyer and an innovation expert. We believe in the team, their passion and their drive to create and most importantly their ability to make this a success.

Their experience and skills coupled with Honeywell Group’s long-standing history of starting and building successful enterprises, will bring a different perspective and level of access to the broader tech ecosystem in Nigeria and across Africa. We believe that jointly we can help get early stage businesses investor-ready and give them access to a new and wider investment pool.

DA: What potential does fintech have in Nigeria and Africa? What can it do for Honeywell?

TO: We see financial technology as changing the economic direction of Africa as it will significantly impact both individuals and businesses. The potential is limitless, which makes doing business easier while also enhancing individuals’ ability to access finance to change their economic fortunes.

Technology will help businesses address challenges that have long inhibited growth both locally and across borders. Fintech should not be seen as just a banking or financial services solution but also a business solution, making the flow and application of funds easier and therefore spurring on growth and development.

Truly, revolutionary fintech solutions have changed the ways in which individuals and businesses interact. Given the state of infrastructure across the continent, solutions have had to address the financial needs of end users directly and have at times bypassed traditional institutions and delivery channels.

For over two decades, fintech companies have impacted the continent – from M-Pesa in Kenya to the cashless revolution in Nigeria that has seen the payments landscape change beyond recognition with Interswitch leading the way for a new wave of businesses like Paystack and Flutterwave.

Our interest in fintech is twofold, first as a business we see fintech solutions as enabling our businesses to grow and interact with our customers and other stakeholders more effectively. Secondly, as a Group we are already invested in financial services companies and understand the power of finance. We believe that fintech companies are poised to enhance and disrupt the financial services industry and we want to support and to be part of the revolution.

DA: Do you plan to scale this further?

TO: The accelerator is a part of our overall plan to support and invest in tech and tech-enabled businesses as we will also be investing growth capital in more established startups. We believe in the power of technology and want to continue to play a part in helping to build the African ecosystem.

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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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