In an article dedicated to demonstrating that it’s taking Africa’s richest people too long to grasp the opportunity of investing in internet ventures, Nigerian Video on Demand (VOD) entrepreneur Jason Njoku says Strive Masiyiwa didn’t seem to understand their VOD business when he spoke to him last year.
Jason Njoku founded and leads what is now one of Africa’s largest VOD companies. Called Iroko, the company has often been referred to as the Netflix of Africa. It’s a streaming service that’s focused on Nollywood content but they also have other stuff from outside Nigeria. We’ve written quite a bit about them and their competition here.
Njoku says in his article that they met because Strive was interested in strategic relations with Iroko. “He was technical, had strategic data assets, had oodles of capital but just didn’t seem to grasp what little we were attempting to do” said the Nigerian founder. Njoku says the meeting went on for over 2 hours and in that time Strive couldn’t “connect my vision with him.”
Njoku had the same experience with celebrated Nigerian banker, the founder of Zenith Bank, Jim Ovia. Ovia apparently also couldn’t grasp how a small movie streaming internet startup could be a worthy investment. Ovia is worth $1.5 billion, while Strive is reported to be worth over $600 million.
Iroko has to date raised over $35m, all of it from investors outside Africa. The latest was a $19m from Europian investors secured in January this year.
Njoku explains that Africa’s richest people somehow prefer to not invest at all in the industry, or go and do it themselves. Strive went to announce the launch of Kwese TV, Econet’s own VOD service in December last year.
The story is, of course, Njoku’s version of it. It could be that Strive was put off by something else that wasn’t the quality of the business model. In fact, strangely, Iroko seems a partner in Kwese’s new streaming service. The app Kwese made available recently, which we wrote about yesterday, has lots of what’s being referred to as Iroko Gold Nigerian movies. The app was pulled from the Play Store after our article.
Njoku’s bigger point however is that while investors outside Africa (like Facebook, Y Combinator, Omidyar Network, Canal+, Tiger Global, Kinnevik AB and others) are pouring tens of millions into internet ventures founded by Africa’s youthful technology entrepreneurs, Africa’s rich people are preferring to invest in traditional offline business, or just bypassing the young people to do it themselves.
In summary. Let them be. The money will come. It will just take time. Iroko investors made a (x30) 3,000% exit. Other stories need to be told to demonstrate the value creation. As a consumer internet investor, your ambition is (x10) 1,000% so your appetite has to embrace the risk associated with that.
These grand old men of Africa I doubt will ever understand until it’s patently obvious and / or too late. When they do, they need to have educated themselves. They’re not children. That education and enthusiasm for new things will lead them to invest in the young. Until then. Let them be.