Startups are changing the world, and a Nigeria is joining in this wave. Startup businesses and their activities are having a far-reaching ripple effect on the socio-economic fabric of the demography in which they operate. They impact on customers by offering specialized products or service, they generate employment and pay taxes to the government amongst other benefits.
In Nigeria, we are beginning to see our own fair share of startups spring up in numbers aided with the rise in technological advancement. Over the past few years startups that spring to mind here in Nigeria include names like Konga, Hotels.ng, Iroko TV, Jobberman, Simple pay, BudgIT and others.
The purpose of this article is to find out how these startups raised equity to run their businesses.
Konga.com is a Nigerian e-commerce website and an online shopping mall launched in July 2012 by Sim Shagaya. On the website one can get everything from electronics, computers, mobile phones, refrigerators, books and fashion accessories delivered to you within 24 hours.
Shortly after launching in 2012, Konga raised a $3.5 million seed round from investment AB Kinnevik. In early 2013, Konga raised a $10million series A round from investment AB Kinnevik and Naspers.
In late 2013, Konga finalized a $25 million series B round from previous investors, Investment AB Kinnevik and Naspers, the largest single round raised by a single African startup at the time.
In late 2014, Konga finalized a $40 million series C round from Investment AB Kinnevik and Naspers, the largest single round raised by a single African startup to date. It is worth noting that Konga received $13.5 million worth of orders during its 2014 Black Friday Promotion.
2. Simple Pay
Simple Pay is an innovative payments platform that allows users with an e-mail address and a bank account to securely and conveniently send and receive payments online. It was founded in 2013 by Simeon Ononobi who had a plan to solve the problems associated with making payments in Nigeria such as the hefty costs for payment gateways and the drudgery and unsafe exposure of personal debit and credit card details on multiple sites.
Simple Pay pitched at the 2013 edition of the Seedstars world startup competition where the company was able to raise $330,000.
The company also went for the global event in Geneva, Switzerland where it witnessed a rain of investment proposals from local and international money bags.
Italian investment consultancy conglomerate CBO Group were the first to jump on Simple Pay’s wagon after Simeon’s pitch in Switzerland. The CBO Group offer was $2 million.
Hotels.ng founded in 2013 by Mark Essien is Nigeria’s first online hotel booking portal which provides affordable, safe and convenient online bookings for Nigerian hotels for both tourist and business travelers. It currently has a listing of more than 7,000 hotels in 21 regions across Nigeria and has facilitated up to 2 million hotel reservations since its inception.
In an interview with Vanguard Mark Essien said “when you are building a startup, the first thing you need to do is to make sure you are in the right market”.
He also said “ you have to tell your story, if you do that, people will read about it, they know about you, they get a feeling of who you are so that you will be able to attract funding. That was what we were able to do fast.
Hotels.ng raised $1.2 million from the Omidyar Network, the investment vehicle of eBay founder Pierre Omidyar, and EchoVC Pan-Africa Fund, a seed-stage technology fund.
4. Iroko TV
Iroko TV was launched in 2011 by Jason Njoku and Bastian Gotter.
Njoku was inspired to start the company when he found it difficult to obtain Nollywood movies online for his mother, who he was living with abroad at the time. He researched the Nollywood industry and noted a lack of infrastructure in place for the international distribution of movies. He came to Nigeria and purchased the online license of Nollywood movies directly from the producers. He also struck a deal with Youtube in Germany. The channel became hugely popular in a short period.
Bastian Gotter, a friend to Njoku was the first investor with a $150,000 investment in Iroko TV meant he controlled a 50 percent stake at the time.
In mid-2011, US-based hedge fund Tiger Global contacted Njoku and Gotter to offer them an investment of $3 million. “No pitch. No PowerPoint slides’’.
Tiger Global again led a two-round investment totaling $8 million, with $6 million coming from Tiger Global and $2 million from Swedish-based hedge fund Kinnevik, in July 2012.
Iroko TV also raised $10 million in series B and series C funding from Tiger Global and Kinnevik.
Iroko has also raised $8million in their series D funding.
BudgIT was founded in 2011 by Seun Onigbinde and Joseph Agunbiade. BudgIT is a civic tech organization dedicated to raising standards of transparency and accountability. The idea of BudgIT was to care about accountability and transparency in governance. People are expecting more accountability and asking more questions than social and traditional media can handle.
BudgIT graduated as a pioneer in the co-creation Hub’s incubation programme, raising over $500,000 in funding from different foundations/organizations such as Indigo Trust, OSIWA, MacArthur foundation, U.S State Department amongst others. BudgIT also received a $400,000 investment from Omidyar Network. The co-creation Hub mentorship process was critical to the growth of BudgIT as it helped build a platform for startups.
In an interview Seun Onigbinde had with techpoint.ng, he said that the biggest source of funding for the company is Grants. He said “BudgIT gets grants for things around budget access and visualizations, although it’s difficult to get grants for a non-profit organization”.
BudgIT also has corporate clients like the Elumelu Foundation.
Jobberman, one of the top jobs websites in Nigeria was started by the trio; Opeyemi Awoyemi, Ayodeji Adewunmi and Olalekan Olude in 2009 during the famed ASUU strike. Jobberman.com has been described by Forbes as “West Africa’s most popular job search engine and aggregator’’.
Jobberman at inception was financed from a pool of funds created from their stipends.
In January 2010, the team entered into a strategic partnership with a Nigerian based startup incubator and venture capitalist. By August 2010, Tiger Global Management approached the team and agreed to lead the ‘Series A’ financing and investment in the business.
It was reported around April 2015, that One Africa Media had acquired 100% shares in Jobberman.
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