Will Hunnam, co-founder of the Africa-focused investment platform Orbitt, tells Development Finance about the advantages its digitised interface offers impact investors and the pitfalls the company seeks to remove from the deal process.
Orbitt aims to expedite the process through which Africa-focused investors source investment opportunities. What might an investor who is used to traditional methods gain from migrating to the Orbitt platform?
We’ve set out to enhance traditional deal-making across the continent, rather than replace it. When you think about how investment teams source deals in Africa – by nature a high-contact continent – picking up the phone and meeting company owners face-to-face will continue to be a critical part of originating and ultimately closing transactions.
But by adopting digital technologies, we see huge potential to streamline the entire process and increase investor reach in markets with fledgling business networks. Managing communication through Microsoft Outlook and tracking deals with Excel is a method that works. That said, by automating the process and digitising many of the day-to-day tasks that investment professionals find cumbersome or routine, we can allow the African-focused investment community to focus on targeted investment opportunities that the platform provides.
And while traditional networks are strong for many investors across the continent, there is always room to reinforce them. We’ve hosted events in African cities with 40 or more investors and company owners looking to deploy and raise capital respectively. Despite working in the same industry and country, the individuals have often never met or even heard of each other. That’s where we come in to cut out the time spent searching and to increase the focus on executing transactions.
How useful is the platform for an impact investor specifically, one who looks to align their portfolio with the Sustainable Development Goals, particularly as so many projects in Africa are deemed too risky?
There has been excellent uptake from impact investors across Africa and the feedback from our users with impact mandates has been extremely positive. We pre-screen all investment opportunities that go onto the platform and as a result, we are able to match transactions to social investment mandates. In addition, as a first-mover in our space, we’re constantly looking to innovate and develop new ways to enhance Orbitt’s offering. With partners, we are conceptualising impact tools to help users standardise and enhance their assessment of potential social impact transactions.
To what extent does the convenience of a digitised deal platform remove the investor’s incentive to see for themselves the social impact their project might be having in their target country or community?
Our goal is to increase the incentive for investors to assess social impact in their target country or community. By enabling more efficient deal origination and targeted capital allocation across the board, our view is that the investors will be left with more resources to focus on operational delivery, which includes sustainability.
What do you find to be the biggest barriers to doing business with development finance institutions?
DFIs are yet to maximise their potential, often talking about an excess of capital and a lack of projects vetted for investment. For us, complex and drawn-out DFI investment approaches lengthen the deal cycle. We see a place for technology and digital tools to reduce the man hours involved in assessing the influx of opportunities that land on DFIs’ desks. These barriers are opportunities for us.
In what areas of the platform’s functionality do you anticipate blockchain having a crucial role in years to come?
Security is regarded as a priority for the digital world. We’re currently leveraging our technology to eradicate the day-to-day constraints of non-disclosure agreements (NDAs), to move away from the availability of private information on open email servers, and protect the confidentiality of dealmaker identity. This is in the context of a continent and industry that has been historically traditional. Adoption of a digitised investment process is how we see our role in the African investment ecosystem and tapping into emerging technologies such as blockchain is a mindset inherent in our approach. This includes learning how best to integrate these new structures.
Finally, how do you counter the assertion that investing in Africa is currently too complex, legally, politically and economically, to be rendered digitally?
We’d look at this from a different perspective. Africa needs digital innovation and ambitious technologies to help address its complexities and intricacies, be that investment or any other domain.