Tekedia Institute is excited to welcome Oma’s Whole Foods to Tekedia Mini-MBA. Led by the Managing Director, Chinweokwu Shen, Oma’s Whole Foods products are free from artificial colours, flavours, sweeteners and preservatives. I look forward to an engaging class, especially during the Sustainability module of our program. We will co-share, co-learn, and advance.
We began a new edition this week; registration continues here.
Nigeria’s pioneering subscription video on demand, iROKOtv, is planning to list on London’s Alternative Investment Market within a year. Founded by Jason Njoku and Bastian Gotter in 2011, IROKOtv houses the largest catalog of Nollywood film digital content.
West African film-streaming service IrokoTV will seek to list on London’s Alternative Investment Market within the next 12 months, CEO Jason Njoku tells The Africa Report.
The sale would aim to raise between $20m and $30m, and would value the whole business at between $80m and $100m, Njoku says from his base in Accra. Discussions with brokers will start in the coming weeks, says Njoku, who holds a stake of 18% in the debt-free company.
Iroko has the world’s largest online catalogue of Nollywood films. Njoku has redefined the company’s strategy to target diasporic markets in Europe and North America, rather than growth in its main West Africa markets of Nigeria, Ghana and Côte d’Ivoire.
As you can see, iROKO has a valuation of $100 million despite raising tons of money in its decade history (of course, it has also exited properties like ROC studio). Contrast that with Paystack which exited at $200 million, after operating for four years, and having raised below $11 million.
The fact is this: fintech delivers more leverageable factors in Africa than any sector at the moment, and that is the reason why investors are pouring money into it. This is not to say that other sectors are not doing great. The point here is that fintech produces better numbers and those help to boost the valuation.
In Nigeria alone, Mastercard estimates that of the $301 billion yearly consumer transactions, a high percentage remains off-digital, implying that opportunities exist for fintech firms. Of course, the SVOD has opportunities but broadband connectivity remains a challenge in the continent.
Consequently, iROKOtv has refocused on non-African markets, and listing in London looks natural. More than 80% of its revenue comes from outside Africa, and listing this company in Lagos or even Johannesburg would have been a big mistake. Those markets do not have respect for technology companies at the early phases. London certainly would like to have an iroko – it has more fertile grounds there!
It should not come as a surprise to anyone: selling video streaming products in Africa is a hard business. It is a double whammy for most potential customers: pay subscription fees and then cover the broadband costs. So, it was not entirely unexpected when iROTOtv announced that it was refocusing out of Africa: “Over the next week, IROKO will be defocusing our Africa growth efforts and we will revert to focusing on higher ARPU customers in North America and Western Europe. Even after pushing incredibly hard in Africa for the last 5 years, our international business represents 80% of our revenue today…” This is really a smart move as now the company can focus where it can earn U.S. dollars; I made that case a few days ago when I explained how Nollywood producers are focusing on international markets.
Yet, while $100 million may not look big in this age of inflated valuation, according to Jason, everything is coming just fine. We wish iROKO great luck as it searches for the right soil to grow in London.
“We don’t need more. To be honest, $10 million to $15 million will be for corporate development; the rest will be secondaries for shareholders. As a private company, IROKO’s valuation was never priced above $70 million so anything in our target range wouldn’t be a down round at all,” he said. “Especially if you consider in that time we exited ROK for close to the total amount of capital we raised for IROKO; we have returned $11 million to early investors and shareholders already. We still have material capital left from the ROK-Canal+ acquisition coming in every six months until 2023.”
The biggest movement in African commerce is the fintech movement. In Uganda, I called the fintech sector, the “Africa’s new growth operating system”. Last week, a fintech signed an agreement to provide zero-interest education financing to Tekedia Institute’s learners. We will bulk discount but they take risks for prepaying us! The full press release is coming.
This is the point – nations rise when pioneering entrepreneurs emerge. The future of education funding will not come through government, in Africa, but through innovators, entrepreneurs and makers. I want to commend those who are building, over just complaining.
This is my message: anything is possible in Africa. But we should not be looking for governments to bring those possibilities.
Our Supply Chain Management course in Tekedia Mini-MBA has been revamped. US Army veteran and supply chain expert, @Adebayo Adeleke, has expanded the course, adding the Future of Work in the sector. He examines the industry redesigns and evolving opportunities across all domains – technology, operation and manpower. With Amazon Luiz, Gig Logistics executive and others, we are confident that our members will deepen their capabilities through this course.
Registration continues for the edition which began this week here.
Good People, help me welcome Flux Technology Africa, CEO Walter Isoko, and the innovative team of this amazing company, to Tekedia Institute Mini-MBA. Flux Technology Africa specializes in the development of complex software systems/applications and payment solutions designed for SMEs, Universities, Commercial Banks, governments and other industries.
The Company’s diversity of technical expertise, its agile responsiveness to custom corporate requirements, and its proven commitment to superior delivery technologies have established it a frontrunner in the technology and financial market data industry. The fun part: Flux is hiring.
We look forward to working with the team over the next few months to co-share and co-learn, on innovation, technology, business growth, and more. Welcome to Africa’s Business School.
More companies will attend Tekedia Institute than any university or school in Africa this year. We invite you to join us.