First, Nigeria has to commend Funke Opeke, the CEO of MainOne, a pioneer West African data center and connectivity solutions provider, with presence in Nigeria, Ghana and Côte d’Ivoire ; she did something big even though market dynamics may not have made things easier. Her vision was big – build the waterboards, electricity boards and airports of the future by creating the digital infrastructure of the future under the control of Nigerians. It was a tough call indeed.

We’re just reading that US-based Equinix, Inc  has acquired MainOne. A few years ago, I wrote extensively on the challenges before MainOne and other local operating players in this domain. Infrastructure investment in Nigeria is a thankless business whether it is a digital pipe or building a water facility.

With MainOne in the hands of the foreign investors, it is all complete: Nigeria has zero representation in the infrastructure of its digital future. From MTN Cloud, RackCentre, MainOne and Vodacom to others like AWS, Azure and Alibaba Cloud, everything is gone.

MainOne was built to dominate Africa but Nigerian digital startups did not come along largely because of financial muscles. With Amazon AWS and Azure winning the digital space, the future which MainOne needs to thrive was not certain.

Nonetheless, I congratulate Funke Opeke and the team for building this company but truly not excited that Nigeria has lost another core asset as we march into the digital future. This is like selling our water board, electricity board and airport in the digital space.

Sure – “o bu ahia” [it is all market] as they say in Igbo.

Full press release

REDWOOD CITY, Calif., Dec. 7, 2021 /PRNewswire/ — Equinix, Inc. (Nasdaq: EQIX), the world’s digital infrastructure company™, today announced its expansion into Africa through its intended acquisition of MainOne, a leading West African data center and connectivity solutions provider, with presence in Nigeria, Ghana and Côte d’Ivoire. The acquisition is expected to close Q1 of 2022, subject to the satisfaction of customary closing conditions including the requisite regulatory approvals.

The transaction has an enterprise value of US $320M and is expected to be AFFO accretive upon close, excluding integration costs, marking the first step in Equinix’s long-term strategy to become a leading African carrier neutral digital infrastructure company. With more than 200 million people, Nigeria is Africa’s largest economy and, along with Ghana, has become an established data center hub. This makes the acquisition a pivotal entry point for Equinix into the continent.

Equinix believes MainOne to be one of the most exciting technology businesses to emerge from Africa. Founded by Funke Opeke in 2010, the company has enabled connectivity for the business community of Nigeria and now has digital infrastructure assets including three operational data centers, with an additional facility under construction expected to open in Q1 2022. Upon closing, these facilities will add more than 64,000 gross square feet of space to Platform Equinix^®, with 570,000 square feet of land for future expansions. MainOne owns and operates a subsea network from Nigeria to Portugal, as well as 1,200 kilometers of reliable terrestrial fiber network across southern Nigeria. These are all improving connectivity to and from Europe, West African countries and the major business communities in Nigeria. When completed, this acquisition will extend Platform Equinix into West Africa, giving organizations based inside and outside of Africa access to one of the world’s fastest growing markets.

Charles Meyers, President and CEO, Equinix:

“The acquisition of MainOne will represent a critical point of entry for Platform Equinix into the expansive and rapidly growing African market. MainOne’s leading interconnection position and experienced management team represent critical assets in our aspirations to be the leading neutral provider of digital infrastructure in Africa. Growth of data consumption in Africa is amongst the fastest in the world, and our customers are looking for a trusted partner to pursue the opportunities presented by broad mobile adoption and greater connectivity across the region. MainOne’s infrastructure, customer relationships, partner ecosystem and operating capability will extend the reach of Platform Equinix and bolster opportunities for customers in Africa and throughout the world.”

Under the terms of the transaction, the management team, including CEO Funke Opeke, will continue to serve in their respective roles. Opeke holds a master’s in engineering from Columbia University and was named one of the World’s Top 50 Women in Tech by Forbes in 2018 for her efforts in sparking internet adoption. She was also recently named one of the Top 10 Women to Watch in the Data Center Industry by Data Centre Magazine.

Key Facts

• Under the terms of the agreement, Equinix intends to acquire MainOne and its assets with an all-cash transaction at an enterprise value of US$320M, which is expected to be AFFO accretive upon close, excluding integration costs. The transaction is expected to close Q1 of 2022, subject to the satisfaction of customary closing conditions including the requisite regulatory approvals.
• MainOne’s assets include:
  • Three operational data centers, with an additional facility under construction expected to open in Q1 2022. These facilities will add more than 64,000 gross square feet space to Platform Equinix, in addition to 570,000 square feet of land for future expansions.
  • An extensive submarine network extending 7,000 kilometers from Portugal to Lagos, Accra and along the west African coast, with landing stations in Nigeria, Ghana and Côte d’Ivoire.
  • A terrestrial network of more than 1,200 kilometers of reliable terrestrial fiber in Lagos, Edo and Ogun States. Connectivity to terrestrial sites extends across 65 PoPs (points of presence) in cities across Portugal, Nigeria, Ghana and Cote d’Ivoire.
  • Access to key internet exchanges enabling low latency to key global networks, including Amazon, Microsoft, Apple, Google and Facebook.
  • An estimated 800+ business-to-business customers, including major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.
  • Nearly 500 employees and a management team with a deep understanding of local and international markets.
• The facilities generate approximately US$60M annualized (Q2’21LQA) revenue with a purchase multiple of approximately 14x EBITDA.
• Globally, Platform Equinix is comprised of 237 data centers across 65 metros and 27 countries, providing data center and interconnection services for over 10,000 of the world’s leading businesses, including more than 50% of Fortune 500 companies.

Additional Quotes

John Dinsdale, Chief Analyst & Research Director, Synergy Research Group:

“Africa has been the missing piece in the Equinix jigsaw, and this acquisition of MainOne will be a great first step onto the continent. The demand for data center services in Africa is strong, with Nigeria at the epicenter of exponential economic growth in West Africa. Nigeria is Africa’s largest country by both population and economy, and its growth drivers include rapid mobile adoption, increased data consumption from its young population, good subsea and terrestrial connectivity, and a strong enterprise market. This is advancing the region toward a more digitalized economy and driving data center growth and expansion to provide much-needed digital infrastructure.”

Funke Opeke, Founder and CEO, MainOne:

“Equinix will accelerate our long-term vision to grow digital infrastructure investments across Africa. I thank our founding shareholders led by Mr. Fola Adeola, MainStreet Technologies, AFC, PAIDF, FBN, Polaris and AfDB for investing in the MainOne vision to bridge the Digital Divide in Africa. With similar values and culture to what we have jointly built in twelve years, Equinix is the preferred partner for our growth journey. The MainOne team is excited about the partnership created through the acquisition, and we look forward to building our next chapter together.” 

Eugene Bergen, President, EMEA, Equinix:

“Expansion in Africa has long been a strategic priority for us. With MainOne, we have found a company that not only has highly complementary data center and connectivity assets, but can further accelerate the expansion of our business model and growth objectives. CEO Funke Opeke and her team have built a powerful and dynamic infrastructure that will enable international customers access to the continent and African organizations access to the global Equinix platform. Customers can take full advantage of Equinix’s leading global interconnection services to connect with customers and partners, participate in rich digital ecosystems and expand their business across Africa and around the world.”  

The Challenge before MainOne and Rack Centre

Comment on LinkedIn Feed

Comment 1: It’s never easy, to build and hold requires lots of financial muscles, and if you are not getting the oil needed – your growth will be stunted.

That is why it’s disingenuous for any Nigerian not to appreciate what Aliko Dangote has done and is still doing, he remains peerless and pride of the nation. The man Dangote could have cashed out long time ago, in the same country we have most of global oil supermajors, but no working refinery…

The other day, the NCC announced three companies that would lead the march to 5G, and Globacom isn’t among them, and the company hasn’t issued any public statement as to why it’s not part of that exclusive party, I find it a bit worrisome.

We have to do more in the area of building internationally recognizable brands, no one says it’s easy or straightforward, but that’s also how you demonstrate that you have come of age, by doing what legends do.

It’s our work that will advance Nigeria and naira, and once we understand the enormous responsibility before us, then we complain less and work much more.

We keep going.

Comment #2: It is indeed most worrisome that the chickens we have been nurturing to lay the golden eggs are being slaughtered on the abattoir of economic disorientation daily. The future we all sort after is being compromised daily! One would have thought that the human capital advantage of Nigeria will drive the future of this nation, but never, the leaders don’t even care!

A situation where the most strategic sectors of a nation are been given out, then, little is left to be wondered at.

The lady, Funke Opeke is an enigma, I remember meeting her sometime in 2018 when I was seeking employment in MainOne. She is a woman with great insight, and you can’t meet her and not wonder how she is able to manage such an enterprise. I know she has better choices up her sleeve, she has done well.

Money does not solve most fundamental growth problems; product improvements do! Work hard to understand your customers and do all to retain them before you begin to spend on massive scaling.

Never try to scale a business until you can retain customers. That customer retention is a validation of your business hypothesis via product-market fit.

A growth playbook which begins when a company cannot retain customers wastes resources. You are likely going to onboard customers, but the day that marketing or promotion blitz stops, the customers will move.

Build. Pursue product-market fit. Then Scale.

I have written extensively on my admiration of B2B Ecommerce in Africa. I have also been consistent that I do not like B2C ecommerce business models like the type run by Jumia. Africa’s B2C ecommerce has a marginal cost problem and if you examine the cost, you will realize that there is nothing “electronic” in the model.

That noted, I have made the case that a new generation of ecommerce companies will rise and they are going to be B2B. By Q1 2023, they would have larger market capitalizations than Jumia which is the largest in the continent now.

Today, we are reading that TradeDepot has raised $110 million: “TradeDepot, a Nigeria- and U.S.-based company that connects consumer goods brands to thousands of retailers and helps with distribution, has raised $110 million in new equity and debt funding as it looks to bring in more retail stores and expand its buy now, pay later service across the continent.”

`In this business are Supplias, Omnibiz, Alerzo, and Mintyn. All these firms are just focusing on Lagos, Port Harcourt and Abuja and have growth ahead. They are yet to get to Ovim, my village in Abia state. It would take time to digitize African retails and I see this to be decades-long!

I am also bullish on the B2B business model that we invested in Africa’s largest downstream digital tech in the oil and gas. TradeGrid is growing in triple digits quarter by quarter. Tekedia Capital members who invested in it are smiling. We also pushed that business model for a new startup that we’re unveiling in January. Again, Tekedia Capital members came really big on it.

Good people, it is about marginal cost. B2B solves that problem at scale. That is why these companies are raising millions of dollars. Pay attention because what these companies are doing will make our banks very irrelevant in the near future: “just as any B2B e-commerce platform offering BNPL services, TradeDepot does not provide these merchants with cash advances. Instead, it sends the products directly to them while they pay in installments. The monthly effective interest rate stands at almost 5%.” Yes, that is 5% monthly and every retailer wants it because there is no paperwork since it is Buy Now Pay Later.

Depending on how you look at it, that is a 60% annual interest on trade financing – and the company has $110m to take more traditional bank customers.

Do Not Waste Time Starting B2C Ecommerce Business in Nigeria