With a portfolio that boasts Terragon, SudPay, Gebeya, Julaya, Chari, and Yoco, Orange Ventures Africa is one of the most active corporate venture funds operating in Africa.
Founded in 2015, Orange Ventures invests in startups operating in sectors that complement the operations of its parent company, the Orange Group. Currently, the fund has €350 million in assets under management and recently announced a partnership to co-invest in African startups with Digital Africa.
On the sidelines of the recently concluded GITEX Morocco, Brelotte Ba, Deputy CEO of Orange Middle East and Africa, spoke to Techpoint Africa on Orange Ventures’ approach to investing in Africa and its strategic outlook.
What are the goals for Orange Ventures in Africa, and how are you thinking about investing in Africa?
I think that when we think of the goals, the first one, of course, is to help all the startups that are out there. We help them raise capital because we invest in the startups and then help them accelerate.
But what is the difference between Orange and the other VCs because we’re not just a financial investor. The difference is really the fact that we are in 18 countries. We have very strong assets in these countries, and then we help the startups have very good synergies with all our operations.
When you look at the startup ecosystem in Africa, it’s very diverse, and given the fact that we are a telecom operator, we have an activity that has many different impacts and also covers different activities.
So we’re in sales, building towers, and have a fintech business that gives us an opportunity to have many connections with these startups in which we invest. That’s probably the major difference between us at Orange Digital Ventures and the others.
It’s not only about money. It’s about nurturing them, helping them, and connecting them with our ecosystem, and we’re one of the largest players in Africa, with over 153 million customers across 17 markets. So this is, of course, a big asset for the companies in which we invest.
You’re primarily a telecommunications company, and that obviously gives you a lot of capabilities that startups can draw on. What are trends that you’re looking out for that you believe will affect startups in Africa over the next few years?
We are an operator, but we define ourselves as a multi-service operator. So this means that we are not only in the connectivity business, but we are also tapping other areas.
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We invest more than €1 billion a year to extend coverage, lay down cables, and provide 4G and 5G networks. This is the starting point, but given the fact that in Africa we have some challenges when it comes to financial inclusion, we have other offers like Orange Money to provide mobile money services, and it works; it’s scalable; we have 9 million registered users and 800 million transactions a month, so this is really very big, and we’re very intentional in this to make sure that we have more and more people that are involved.
In some rural areas, Orange Money is the only means to be financially included. They cannot access the bank, and so for us, it is very important to have these offers. We have this offer on Orange Energy to provide solar home systems that are affordable to a large number of customers. We have 300,000 as we speak and want to reach 1 million.
When you look at this whole range of activities, this comes down to, of course, the big trends of AI, digital customer care, and logistics. We have launched a super app called Max It, so it means that we have not only mobile money and telecom but also this marketplace.
So, this is more or less all the activities in which we see potential for partnerships and potential for investments. And these are also areas where Africa, as a continent, has many challenges. We have a population that is growing, we need to reinforce digital services, and we need to provide financial services, so it is not only a business priority for us, but it is also a bigger opportunity for Africa.
Has Orange Ventures had any exits from the startups it invested in? Also, how are you thinking about exits for your portfolio of startups?
Well, actually, when we invest, we look at basically four metrics: the market, the team, the momentum, the market size, the technology, the capabilities, and the team of the startup.
This is really important, and we assess it very often. Of course, Orange, as I mentioned, is a long-term investor, but if we want to exit, we will do it in line with the management, in line with the business priorities, and in line with the needs of the startup.
They may need, for instance, to change their shareholdings, and we’re doing it according to them. The idea is very much for us as investors to be long-term investors, but whenever, in accordance with the team, you want to change the portfolio, we do it with them.
Well, as I mentioned, exit is one of the options, but, of course, when we invest, all the periods are defined, and the exit conditions are also defined.
It depends on many things: the market trends and the momentum. It’s really that when we invest, of course, we invest in the long term.
Do you think that larger businesses in Africa should get involved in venture capital, and what are some considerations that they should look at before doing that?
I think that the best answer to your question is just this kind of summit. When you look at all this momentum, I think that this is the best answer. It only shows what we have in Africa: a young population, innovation that is there, some breakthroughs, for instance, in mobile money and payments, and the shortening of the period between innovation that we see in Europe and in Africa.
We’re seeing it very much in the networks. For instance, when you look at the 2G and 3G networks, it’ll take like 10 years to get 3G in Africa, and this is no longer the case. When you look at 5G just two or three years down the line, it’s already applicable in Africa.
So population and demography are very important. The third one is that when you look at Africa, we talk about Africa, but Africa is 54 countries and has very different dynamics.
Some markets are pretty much there in terms of ecosystem, in terms of startups, in terms of financing, and I think that just a couple of years down the line, we will have not just one Silicon Valley, but at least 10 when you look at where South Africa is right now: Kenya, Nigeria, Egypt, Senegal, Ivory Coast, Morocco, so this is really very encouraging for Africa.
At Orange, we’re an operator that has been here for 30 years and is very confident in how it’s evolving.
