Today, Mobofree, a social classifieds site based out of Lithuania but big in Africa, sent out a somewhat strange press release whose sole purpose was to announce that the marketplace website has US $526 million worth of items currently for sale and that they expect to reach US $1.5 billion by 2015.
Strange because usually a marketplace’s value would be measured by the number of active users, especially one that, as Mobofree does, allows users to contact each other independent of the platform (via phone numbers). But they already did the active users announcement two months ago when they announced they’d reached 3.3 million subscribers, most of them from Nigeria followed by Ghana and Zimbabwe.
Allowing trade to take place outside the platform means Mobofree are not currently keen (are not able) to monetise on transaction fees. Which brings us to why they’d do a press release to start with. Maybe existing and prospective investors need to know there’s huge potential to monetize those transactions in the future. Hence the generous $1.5 billion projection.
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Assuming that the average value per active user right now is about $159.39 ($526m/3.3m users) then roughly that means Mobofree expects to increase the number of users from 3.3 million users to about 9.4 million users within the remaining 4 months ($1.5b/$159.39). Well, either that or the average value of items sold per active users will increase drastically.
It’s not that it is impossible for Mobofree to increase to 9.4 million active users by 2015. We have no idea. But Mobofree itself said in August 2013 that their active user base was increasing at a rate of 3,000 per day. And even that seems to have dropped as Mobofree clearly added much less active users than that between August 2013 and August 2014; just an additional 800,000 which translates to 2,222 a day.
To add to that, where Mobofree was reported to have been in Opera’s top 8 sites in Nigeria, top 5 in Zimbabwe and top 9 in Malawi in 2013, they had clearly dropped out of the top ten in all countries on the continent by February 2014.
It leaves us wondering what the true picture is. Are they really growing as strong as their press releases want us to believe?
Just a little background to conclude. Mobofree was founded in 2011 by Lithuanian based Neringa Kudarauskiene. So far, it’s most reported funding is one it got from eVA Fund this year in February. Amount not disclosed unfortunately. You will remember eVA from the $1 million dollar investment in Umuntu Media. According to the Mobofree website, the social marketplace is operational in Nigeria, Ghana, Kenya, India, Tanzania, Uganda and Zimbabwe. It’s referred to as a social marketplace because the site uses social interaction to create “a safe, secure environment.”