Through a blend of modern and edgy designed stalls, Africa’s food, drink, and hospitality trade expo, Hostex 2024, kicked off on Sunday, March 3rd…
Africa’s internet scene is growing, Africans are building killer apps and innovating in amazing ways. One of the pioneers leading Africa into a new age of disruption is Jason Njoku, the founder of iROKO Partners — a media entertainment empire that owns iRoking and the insanely popular iROKOtv. Njoku has been heralded as the creator of Africa’s Netflix by Forbes’ and was also been named one of the continent’s richest entrepreneurs by the publication.
iROKOtv is an African video streaming services that specialises in bringing Nigerian and Ghanaian movies online for free. The platform also offers access to newer content where users can pay a monthly subscription fee of US$5. Njoku is building a tech empire in Nigeria and he is moving into the investment space with Spark, a venture that hopes to help grow Nigeria’s tech community.
Njoku, who grew up in the United Kingdom, returned to Nigeria to build his business after realizing a content gap existed for Nigerians in the diaspora. When I first meet him, I asked him why not do it from the UK, his response: “Nigeria is where the action is.”
With this new investment arm of his business, Njoku is putting his money where is mouth is and hopes that more tech entrepreneurs will rise up in Nigeria. We caught up with the man behind the headlines to chat about iROKO, Spark and the future of Africa’s tech scene.
Ventureburn: Looking at the companies Spark has invested in already, there are a lot of booking services (hotel, bus, room letting) — other than the service industry in Nigeria, which other industries do you see tech startups having a role to improve/disrupt/fill the gap in?
Jason Njoku: The first wave of super-successful, Nigerian internet companies will, undoubtedly, be those that help to facilitate offline activity, hence this is where we’ve invested heavily. Booking a hotel room is not an easy thing to do in Nigeria. In the West — search, click, click, click, double-click — you’re pretty much done. Nice hotel room — all sorted. In Nigeria, it’s not so easy and traditionally, it hasn’t been so easy to search for one of the many thousands of hotel rooms that exist in the country. The same goes for letting out properties. In Nigeria, most people drive around areas and look for signs and have little idea who they’re dealing with. Who does that in the West?
But we’re not just focusing on the service industry — we’re working with an awesome fashion t-shirt distributor called Giddimint and these guys sell super-cool, top quality African-inspired tees to the fashion conscious. Outside of that, we’re also working with a drinks distribution company.
Crudely speaking, tech startups and companies will infiltrate every industry — tech will disrupt all industries as we know them today. For us, we don’t necessarily choose service industries, we choose industries where there’s a gap, where we see opportunity to monetize and where we find entrepreneurs with expertise and passion.
VB: Do you see the future of online streaming (in Africa specifically), being content-driven: streaming services focused on niche genres of TV (just a soap-opera streaming site), or location-driven: Nigerian-content only, Kenyan-content only etc., and why?
JN: For the foreseeable future, I believe it will be content driven — why? Because quality content, in a digital age, has no geographical boundaries. There’s a reason that Nollywood is the dominant film industry because it’s quality content that a lot of people can resonate with and, ultimately, enjoy.
We’ve definitely seen this with iROKOtv, where it’s watched by people in 178 countries, with our most popular geos being in the West (the US and UK make up almost 50% of our total viewership). The majority of this is a diaspora audience, but we also have a lot of fans from the Caribbean. Strong, evocative storylines and characters travel — they just need the right platform. At the moment, iROKOtv has mostly Nigerian and Ghanaian content as that’s what our audience wants, but there’s nothing to stop us expanding beyond this in the coming years and if we do, I doubt we’d restrict access to specific geos.
Of course, we won’t really be able to tell with any definitive conjecture until Africa comes online and the people can have their say. Video on demand in Africa is still in its infancy — and while I think it will be huge, and part of its proliferation will be attributed to mobile, outside of that, I’m not sure how it will play out. We’re waiting for better internet here in Africa and when it comes, things will move speedily. The internet is democratic in that people will go where they want to go.
VB: What’s the number one thing Spark (or you as an angel investor), looks for before investing in a company?
JN: Bastian and I look for a number of determining factors — hunger to succeed, traction gained already and potential to dominate in the chosen market. We also have something called the [please excuse my French] the ‘fuckability factor’. If we like you and trust you and your decision-making with small amounts of money we seed fund you with and we go on to see real progress, we will fund you to the next stage.
So far, this approach has worked for us and a number of the companies we have invested in are already seeing second and third round investments from us. We don’t invest in pie-in-the-sky ideas and we don’t invest in companies that try to use a simple Western template and directly apply it to the African consumer. We invest in African solutions that will disrupt the norm and will cater for and attract African consumers.
VB: How do you see the race to be the leading tech hub on Africa shaping up — Cape Town, Nairobi, Lagos — and their pros and cons respectively?
JN: From what I can see, each country’s hub has its own niche — its own identity. Nairobi gets a lot of love for, and rightfully, so, its concentration on innovation and the fact that they’re not afraid of challenging new areas and disrupting the norm. MPesa, for example, has really tackled the issue of mobile payments in Africa and has helped put Nairobi at the heart of Africa’s tech revolution. The guys there are doing some exciting things and the hubs there are producing some interesting results, hence they’ve been able to attract such massive investment for the tech hub currently being developed.
Cape Town? The market there is more mature, so it’s easier to attract investors. Nigeria, however, is rising — and quickly. I believe it was not so long ago that it was reported that the country would soon overtake SA as the continent’s leading economy. Part of this will be thanks to emerging sectors such as internet and technology and we launched Spark here rather than in any of the other tech hubs as we believe Lagos is the gateway to Africa’s tech revolution.
We must turn our attention to what tech hubs / angel investors / accelerators are doing and who they are funding. I see that in the US, there’s already a fatigue towards accelerators and that too many entrepreneurs are getting funding for mimicking same-old ideas. Hopefully across all the African tech hubs, we can keep the spirit of genuine innovation alive because we are starting pretty much from scratch. So I hope that all the tech hubs prioritize innovation over duplication.
Who’s winning — I’ll let the other pundits fight that one out…
VB: Do you think Nigeria-Kenya-South Africa will be able to co-exist and co-invest, creating a pan-African ecosystem? If so, what do you see each country’s role being in this theoretical pan-African tech ecosystem?
JN: Yes — if all of them concentrate on developing a tech scene and tech solutions for Africa. Here’s the thing — Europe has both London and Berlin as key tech hubs – and there are other pockets spread across the continent. And in the US, you have both Silicon Valley (San Jose, West Coast) and also Silicon Alley (New York, East Coast) — that’s just in one country. Why shouldn’t Africa have the same?
Kenya, South Africa and Nigeria are not at the same level yet as their Western counterparts, for sure, and they have not been exposed to anywhere near the levels of VC and angel investment as the US and European tech markets. But, slowly, investors are becoming more and more interested in the African internet market and the respective tech hubs are benefiting from this. Africa is huge. Really really huge. It deserves more than one tech hub; it needs it!
VB: Looking towards the future: what’s after mobile on Africa? Where do you see the next big investment coming from?
JN: Mobile in Africa is big and will become massive — without a doubt. Mobile and Africa are ubiquitous and we have not even seen mobile reach its peak. The opportunities are stratospheric and anyone who’s not keeping one eye on the mobile market is not a serious player. What comes after mobile? I guess it will be interesting to see how the tablet penetrates the market.
VB: Do you negotiate the challenges of mistrust associated with Nigerian web-based companies?
JN: We negotiate them and then we manage them. We have spent an awful lot of time talking to people and talking to the international press by means of legitimising ourselves as a ‘good Nigerian’ company. It is a long, drawn out process and because we put the effort in to promote ourselves in a positive light from day one, we now have the respect of many. I hope that this has also filtered through and other Nigerian tech start-ups are benefiting from this.
Furthermore, we decided from day one that we would be extremely visible — so with iROKOtv, no matter where you are in the world, you can speak to one of our customer service assistants online. We also engage with our audiences directly on Facebook, Twitter, our blogs, via the comment system on our site. This has gone a long way into proving that we are not some scam Nigerian company, but a legitimate enterprise.
VB: What has your experience been as a Nigerian entrepreneur, especially when approaching international investors… what is the world’s perception of Nigeria in terms of business investments? How has this changed as your career has progressed?
Nigeria as an investment opportunity still has some way to go. Even Nigerians are not always willing to invest in Nigeria and I was privy to this when I was trying to raise funds for iROKO. I spoke to so many Nigerian friends, family and acquaintances, all of whom told me in no uncertain terms that they wouldn’t invest in a Nigerian internet company. Only my best friend Bastian had faith in my enterprise and decided to invest.
Today, he’s made his money back whilst the Nigerian naysayers have lost out. What can I say? The mistrust Nigerians have for Nigerians will restrict Nigeria’s business ecosystem revolution — they / we have to learn to trust each other more and do business in a better fashion. If we can’t do business with ourselves, can we expect outsiders to be beating down the door and biting our hands off to give us investment money?
But before I get too melancholy, I should say that things are getting better. Nigeria, whilst still stigmatized by many as a ‘dodgy place’ for internet business, is breaking free from the shackles and is becoming a more attractive place to do business and is attracting more and more foreign investment — I’ve noticed a significant attitudinal change in just three years. Nigeria, as I’ve mentioned previously, is taking on SA to become Africa’s biggest economy — you simply cannot ignore us. Investors cannot ignore us.
There seems to be a growing number people investing in African startups, but are there enough people investing in the infrastructure that will allow those startups to thrive? No — not yet. There’s still a lot of home-grown Nigerian investment that needs to be set-free. We need better roads, better telecommunications, better internet, better banking structures, better business support, better tax breaks — I could go on. Doing business in Nigeria is by no means easy and I long for the day when money is channeled into the country’s infrastructure. But people still manage to create awesome businesses even in these hostile surroundings, it just means they have to think on their feet and work harder and stronger than everyone else. If you can make it in Nigeria, you can probably make it anywhere.
VB: Do you think there’s a “killer app” out there that can get Nigerians to trust non-physical forms of cash?
JN: Not yet — but there will be.
VB: Can Nigerian outfits beat big outsiders in the ecommerce game?
There’s a chance that this could happen, yes — if the right tactics are used. Nigerians know Nigerians — in all of their rather fabulous guises. They understand their habits, their preferences, their culture better than anyone else, as well as the challenges they face in trying to get things done in the country. So any crude attempts to simply impose a Western company on Nigeria, that hasn’t been moulded to fit the Nigerian ethos will struggle. That being said, Nigeria does also need an injection of international expertise to get it started so I guess that we will have to find a way with marrying international business methods and influences with the African model.
VB: iROKO Partners is an entertainment company at its core, with video, music and gaming play what’s next? Are we going to see ebooks in your future?
JN: In all honesty, it’s not something that we’re considering at the moment — we publish movies and music via iROKO and we think we do that awesomely well. Our long-term goal is to become a media and African entertainment conglomerate and literature is a sub-sector of this. I guess you never know, but it isn’t on my radar for this year! Bastian and I moved into the gaming world and have thrown our financial support behind KULUYA and we’ve seen it grow from a few guys doing some cool designs based on African characters to a company that attracted a US$50 000 investment based on a US$2-million valuation just six months after launch. If this growth trajectory continues, KULUYA could be bigger than iROKOtv. We dream big and we never say never.
VB: What is the biggest challenge in Nigeria’s tech scene? Do these resonate in Africa’s tech scene as well?
JN: Previously I would’ve said attracting investment, but we are seeing more VCs ploughing money into the sector, albeit predominantly foreign-based VCs. Konga and Jumia are extremely well-funded, and considering our size and niche market, iROKO has also done well in attracting investors. I’ll be happier when I see more Africans investing in the sector though. Other than that, I’d see access to internet is the one biggest challenge. It’s expensive and even when you do pay big bucks for it, it is sporadic and temperamental. We’re all waiting on the ISPs and the telcos to bring the cost of internet down and make it more accessible to the wider population. When I first started the business, I was paying US$3 000 for 2-3Mb a month. Totally outrageous — how can startup businesses afford this and how can the consumer afford this? For the majority, they can’t, so they go without and this is the major stumbling block for the Africa tech scene.
VB: Do you think more African tech expats need to come back home and build their companies here?
JN: Yes — Africa needs Africans, who have gained experience from abroad, to come back and help build up the continent’s infrastructure. Not just in tech, but in all areas of commerce. We need Africans to be solving African problems and I hope that those spread across the diaspora come to realize how many awesome and exciting opportunities there are here on the continent. Whether or not this actually will happen remains to be seen and whilst I love doing business here, it is by no means easy, especially if you approach things with a Western perspective. But, whilst the West is almost close to saturation point in terms of tech and entertainment, Africa is abound with opportunities for pioneers to build whatever empires they choose.