Opportunity Network, the digital matchmaking platform for chief executive officers, has begun talks with domestic banks with the aim of launching in South Africa in the second half of 2017.
The fast-growing platform was founded by Italian Brian Pallas in 2014. The then 28-year old MBA student and member of the Family Business Club at Columbia Business School in New York launched the company in a bid to connect business around the world and increase their potential deal flow.
In two years, the New York and Barcelona-based company, has grown to connect 13 500 business leaders – with an additional 35 000 confirmed members – in 128 countries. It is valued at $150 million and boasts a deal value in excess of $35 billion.
It signed a partnership agreement with Africa1Advisors’ Paul Lamontagne in November 2016, with a view to offer its services to South African firms in mid-2017. But it needs the cooperation of local banks to do so.
“When you look at fintech today, the story is [about] disruptive technology and the spin tends to be that the fintech world is going to disintermediate banks. It is going to bank the unbanked, which we have seen a lot of in Africa, and then will lead to the disintermediation of banks losing part of their customer bases to these new financial technology companies. That is not what Opportunity Network is, it is an enabling platform for banks,” he said.
Instead of on-boarding businesses directly, Opportunity Network’s main clients are banks. It sells membership to banks, who then invite their best clients to participate on the platform and in doing so creates a prescreened online community.
Lamontagne, who headed the Canadian Imperial Bank of Commerce for Africa and the Middle East and chairs the South Africa-focused impact investment company Enablis, said the initial discussions with South African banks have been positive.
Speaking of Opportunity Network’s foreign banking partners, he said some banks on-sell membership to their clients while others, seeking a first mover advantage particularly in smaller markets, give it away free of charge.
Notionally, companies that are allowed to list on the platform must be looking to close deals valued at least $1 million.
“This is not a community of millions. It is a community of tens of thousands and eventually hundreds of thousands. It is really a function of getting the right members on the platform… That would be a business of a certain size, that is looking externally and is prepared to work with, for example, an investor from another country. It is not a small business platform,” he said.
Typically, deals listed on the platform fall into three categories: commercial, investment and mergers and acquisitions.
The listings are of a confidential nature as Opportunity Network allows members to post anonymously using as much or as little information necessary to generate leads. The signing of non-disclosure or confidentiality agreements often precedes formal negotiations.
According to Lamontagne, the platform allows banks to build better relationships with their clients, improve stickiness, facilitate and benefit from deals struck online.
Opportunity Network does not receive a cut from the transactions that take place via the platform. Instead its revenue model is based entirely on charging membership fees, which banks are responsible for settling.