“Itana” gets fuel for its fire

Itana, a digital free zone startup with a vision to help foster the development of the African tech ecosystem raised $2 million last week. 

LocalGlobe, Amplo, Pronomos Capital, and Future Africa led the round. 

The startup aims to “enable entrepreneurs to build a globally respected business in Nigeria’s first digital free zone by leveraging benefits currently only enjoyed by traditional manufacturing or oil and gas industries who have traditionally set up in Nigeria’s free zones”

According to the media report, “Itana will be designed specifically for local and global startups, technology and service businesses looking to scale their operations across Africa without facing the challenges of unstable policies, infrastructural deficits and other business challenges. Using ‘Itana Edge’, our online one-stop-shop platform for business and government services, companies will also take advantage of globally competitive business policies and incentives (as a digital free-zone enterprise)”.

Itana hopes to have its Itana district, a 72,000 square metres “live-work-build” campus set up by 2027. The district will exist within a larger Free Zone, the Lekki Free Zone. 

So What?

The startup’s goal is simply to create a “Delaware” in Nigeria for African companies. 

Delaware is a small state in the USA that has defined itself by becoming the number one destination for companies looking to register in the US. The state achieved this by a combination of favourable tax policies, and a strong and business-friendly legal system. 

To achieve the same outcome, Itana is taking the Special Economic Zone (SEZ) approach. A SEZ is a special geographical area in a country where the laws are set to encourage the development of a particular industry. This is achieved by providing certain regulatory concessions, like tax breaks or the absence of import duties. 

The hope is that by building in Itana, startups will be able to avoid the socioeconomic challenges that plague them when building in Africa. They will do this by operating under a different set of regulations and by providing critical infrastructure (think electricity and suitable living conditions).

We think that the issues startups face are more than just a conducive environment to build and the absence of infrastructure. This is because even if you can build a perfect product in Itana, you will still need to sell to the market that exists outside the zone.  

However, there are still massive opportunities for the project. Even though individual African countries are small markets, Itana provides a base to launch a Pan-African approach.

Also, as one of our writers notes in this post, building in Africa does not necessarily mean building for Africa. So startups can use Itana as a base to build products using African talent and then sell to a global market. 

Itana hopes to solve a real problem but its success will boil down to its execution and continued regulatory support.