For IPO, How Much Revenue Should A Nigerian Startup Hit?

For IPO, How Much Revenue Should A Nigerian Startup Hit?

This viewpoint was credited to Jason Njoku, the CEO of iROKOtv: “I think we’re pretty far away from the IPO. For that to happen, we need to be taking in between $8 and $10 million in revenue.” Possibly, he could be referring to a London or New York exchange. In the Nigerian Stock Exchange (NSE), it does not have to be that high. Of course, not many tech companies may be open to IPO in Nigeria when you look at the records of the firms which followed that path.

I think we’re pretty far away from the IPO. For that to happen, we need to be taking in between $8 and $10 million in revenue. Pre-pandemic, we had a clear path to doing that; now, it’s become much more challenging. But with that said, our goal hasn’t changed. This year, we just need to survive. We’ve taken all the costs we can out of the business, and now we need to start building on revenue. My sense is that we’re delaying for a year or so.

Yet, we need these companies to find paths of exit and NSE remains an option. I just think NSE should offer clarity via a document. Yes, it is very possible that these startups are thinking that they need to do more when in a way some of them could be largely ready for a local IPO.

If your startup generates above $4 million annually, consistently over three years in Nigeria, via subscription or multi-payer payments, not just lump-sum contracting, I do think Nigerian Stock Exchange should make space for you, even in a smaller board.

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One thought on “For IPO, How Much Revenue Should A Nigerian Startup Hit?

  1. Where do we categorise companies that generate over four million dollars, which is over a billion naira: SMEs or big enterprises? From there we can begin to make sense of how much would be enough in Nigeria.

    There’s still exist a huge information asymmetry between NSE and business community, we are never great when it comes education and awareness creation. INEC seems to be head and shoulder above many government agencies here. Maybe the same way NCDC dishes out sms from time to time, NSE should start its own massive awareness campaigns.

    NAFDAC was so popular during the time of Late Dora Akunyili, but now it’s not clear how many young people know if NAFDAC still exists and what it does.

    Once people collect their salaries here, they go to sleep, it doesn’t matter if the public know little or nothing about the work their agencies do…

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