In early 2022, the former co-founder of Andela and Flutterwave Eyinulwa Aboyejiin an interview with TechCrunch, discussed a pilot project he has been working on: Talent City, designed specifically for local and global startups and service companies looking to scale their operations across Africa without facing the challenges of unstable politics, infrastructure deficits and other business challenges.
At the time, the self-described charter city — backed by the Charter Cities Institute and Pronomos Capital, an investment fund backed by Peter Thiel — secured more than $10 million for the project located within Alaro City (in the Lekki Free Zone, just outside Lekki City). . Lagos, Nigeria). Fundraising efforts are ongoing and it may take a few more years until the actual city is completed. Meanwhile, Talent City, now known as… Etanahas raised $2 million USD, money that it intends to use to establish a digital free zone.
Aitana, founded by CEO Lukman Adoactions Director Coco Liu Aboyeji, one of the founding investors, is ready to be the first digital free zone in Africa. The founders say the funding will support the startup’s efforts to improve Nigeria’s ease of doing business index, drive foreign direct investment (FDI), and stimulate employment in Nigeria.
Nigeria hosts private sector-led and government-managed free zones; The first is usually the most successful. Most projects in these free zones come from oil, gas and manufacturing companies, which have benefited from financing, pre-existing tax breaks and incentives associated with being located there. But while waiting for its charter city to be completed, Aetana is looking to create a virtual city in these free zones for companies in the digital industry and services while continuing to offer the same benefits, according to Edu. “We will be able to expand the benefits that traditional industries have always benefited from, including FDI investments in the digital industry and the service industry,” the CEO, who introduced Built technology services and solutions for cities and governments in the UK and Nigeria, He told TechCrunch in an interview.
The first release of the project is Itana Edge, an integrated online application that can be compared to global technology products such as Stripe Atlas. Through it, international companies, without having a physical presence in a Nigerian free zone, when established and operating in the country, can access incentives, including tax, work visas, banking, capital repatriation and supportive legislation. Itana can provide these services through its partnership with the Nigerian government, which issues business licenses.
In the call, Edo likened the idea of a virtual city proposed by Etana in the most populous city in Africa to the state of Delaware in the United States, e-Estonia in Europe, or Dubai in Asia. However, given the government’s involvement, it is unclear whether Aetana can expand as a venture-backed company. “When the laws governing free zones in Nigeria started, they only took into account the physical aspect. Then why not? If private free zones are being invested in and expanded, why shouldn’t that be the case for a digital free zone specifically designed for services,” Edo replied. And the private sector-led digital economy?” He also confirms that Aetana plans to expand through the number of services it offers to companies for remote work, capitalizing on the expected success of its project in Lagos, and partnering with other African governments to replicate digital and physical free zones in their markets.
In Nigeria, Aetana, which aspires to become Africa’s Silicon Valley, will begin its pilot project with selected companies over the next few weeks; It is expected to start operating in the first quarter of 2024. These companies will have access to the upcoming 72,000 square meter “Live, Work and Build” campus, in the Aitana area, which is planned to accommodate permanent residents and visitors from the digital community for networking events. Joint work and living together. The first phase of its development will be completed by 2027.
Model digital cities
According to Liu, Aetana will explore several revenue streams from providing unique digital and physical online jurisdictions for global companies trying to operate in Africa. The first layer is the annual subscription for commercial licenses; The revenue is shared with the government. Subsequently, many other revenue streams will revolve around on-demand services from the free zone single window application, such as banking, visas, tax audits, recruitment, payroll management, business sector licenses and setting minimum non-VAT transaction fees. he won. “We will work with relevant government agencies, and as our customers expand, grow and make money, we will find a way to improve our revenues along the way,” said the COO. She brings operational excellence from her experience working at Google and Building early stage startups.
Although Etana City looks futuristic, there are several factors that could work in its favor to bring its digital and physical cities to fruition. Africa is a continent rich with opportunities for software developers and foreign direct investment, as proven by Stripe Atlas data showing 400% annual growth for companies incorporated from Nigeria. Back home, there is also the Nigerian Start-up Act and Appointment Bosun Tijani, Chief Technology Officer, has been appointed Minister of Innovation and Digital Economy, a role that could boost the development of national projects from Nigeria’s technology community, including bold projects like Project Etana. “There are some amazing things that go along,” Aboyeji told TechCrunch. “For example, the emergency that Bossun faces as minister, especially in light of his tendency to focus government funding on incorporated Nigerian companies and the Nigerian Stock Exchange’s plans to allow companies in the free zone to go public in dollars. It could be the perfect storm that brings our companies back home.” “
Aboyeji’s Future Africa investment fund is one of Etana’s backers. Others include global venture capital firms LocalGlobe, Amplo and Pronomos Capital, which It has supported model digital communities and network countries such as e-Estonia and Afropolitan. “The market opportunity to serve digital services and technology companies in Africa is significant. The ecosystem is growing at a rapid pace despite the huge infrastructure challenges faced by startups across the continent,” Yvonne Bagella, Partner at LocalGlobe, said of the investment. We have seen the success of digital communities, such as e-Estonia, in enabling businesses to scale. We are excited about the potential for Aetana to proactively address these challenges while supporting a new generation of entrepreneurs in Nigeria and beyond.