As there is currently only 16 per cent of Africa’s one billion people online, the internet’s transformative potential on the continent has plenty of room to explode. Thus, there is a growing increase in venture capital investor confidence in the continent’s online space and Internet Gateway Device Protocol (IGDP).
“I came to Nigeria in 2010. Then there were no real funded companies and there were no real stories. Fast forward [to] 2013, we had a record year in terms of companies making money, in terms of getting and just the whole excitement started going beyond the tech blogs and into the actual mainstream press,” Jason Njoku, CEO of Iroko TV told CNBC Africa.
According to Mckinsey’s global institute report, 167 million Africans currently use the internet and Iroko TV is the continent’s biggest play into online consumption as it provides African’s in the diaspora with Nollywood films. The company was also able to secure a 8 million US dollar funding in late 2013.
“Raising money is a yardstick. You don’t raise for raising money sake, you literally raise money to do something. From the original stance, we told investors, when we first go funded in 2011, and even in December, the same story. There is going to huge amounts of broadband penetration over the next five years in Africa especially in Nigeria,” he said.
The media company which was founded in 2010, received its funding from venture capital investors and it core investors are Tiger Global, Kinnevik and Rise Capital.
“We feel that entertainment forms a big part of that, so our view is that if we yield the right products to entertain Nigerians, we should be able to build a relatively large business. Today only 3 per cent of our revenues actually come from Nigeria, so we still have a very long way to go. The 8 million dollars is to help us build a better Nigerian business,” he explained
Njoku believes that venture capital investors look out for honesty and credibility before investing in young online start-up companies. The success of the company has given rise to a new breed of online start-up companies.
“My story is a bit of an anomaly, but in reality, it should be much more common,” he added.