Login

Lost your password?

Sign Up

Register

Login

Login

Lost your password?

Register

Wednesday, July 6, 2022
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion

Africa's
Investment
Gateway

The Exchange
  • Login
  • Register
Subscribe
This Month's Edition
Previous Editions
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
No Result
View All Result
The Exchange
LOGIN
alternatetext
Nigeria's IROKO editing team. Photo/Courtesy

Nigeria's IROKO editing team. Photo/Courtesy

Nigerian media company IROKO to go public on the London Stock Exchange AIM

Nigeria's IROKO plans to go public on London Stock Exchange in 2022

by Mustapha Juma
February 11, 2021
in Business, Economic Growth, West Africa
0
Share on FacebookShare on LinkedIn

Nigeria’s IROKO Partners Limited media company is working on plans to list on the London Stock Exchange (LSE) Alternative Investment Market.

Reports indicate that the Initial Public Offering (IPO) could be effected in the next 12 months. The company had earlier on announced plans to go public either on the London Stock Exchange or a local bourse on the continent but sought an international presence as this may enable further growth of the industry and the company itself. 

About Nigeria’s IROKO Partners

The company was founded in 2011 by Jason Njoku and Bastian Gotter and boasts the largest online catalog of Nollywood film content globally.

The media company, according to reports, will raise between $20 million and $30 million, valuing the company at $80 million to $100 million. 

While making the announcement in October 2019, the company’s CEO Mr Njoku, however, did not reveal the exact time this was going to happen, and remained mum on the whole process in 2020.

The company in 2020 had plans to increase its average revenue per user (ARPU) in Africa for its video-on-demand service, iROKOtv, from $7-8 to $20-25.

This was, however, not achieved amid Covid-19 pandemic-induced lockdown fears.

Consumer discretionary spending reduced in Nigeria and other African markets leading to a 70% drop in subscription numbers, and in May, 28% of the company’s staff went on unpaid leave.

But unlike the numbers iROKOtv local markets put up, its international subscribers grew 200% during the lockdown, hitting a $25-30 ARPU range.

However, more bad news came in August when the CEO announced that the company was laying off 150 people. 

While making the decision, Njoku cited the naira devaluation, regulatory onslaught by the country’s broadcast regulator and a reduced outbound marketing team as reasons behind the lay off.

With the company spending $300,000 or more every month on growth, it decided to halt any scaling efforts on the continent. 

IROKO instead focused on its international market, primarily the U.S. and the U.K., where it has been able to execute a 150% price increase from $25 per year to $60 per year.

Njoku said this decision set the company straight, leaving it in a stronger cash position than it had been for years.

Speaking to TechCrunch, he said the costs of pursuing Africa growth is what was really resized dramatically, citing that they were so focused on defending Africa and basically ended up doing nothing.

“We pulled back to focus on where our economics actually makes sense. Our international business organically grew double-digit in 2020 and we expect it to continue this way for the foreseeable future,” he said.

Understanding Africa’s Entertainment Industry

Image for post

PriceWaterhouse Coopers published a report in 2018, indicating that Nigeria’s entertainment industry stood at a whopping $4.4 billion. Much of this is partially due to its music stars whom have gained international recognition. Some of these include Davido, Burnaboy and of course the brother duo group P-Square.

Nollywood itself stands second in terms of output, after South Africa’s film industry, which garnered $9 billion in 2018. East Africa alone yielded about $2.4 billion collectively. Given that mobile telephony is growing day by day on the continent, the ability for individuals to access content remains massive.

With South Africa and Nigeria leading the scene, industry experts such as PWC indicate that the industry could very well surpass $10 billion by 2023, enabling growth for a significantly larger number of other entities to enter the market. For sure a number of American companies are already looking to establish a strong presence in Nigeria, Kenya, South Africa and not to forget Tanzania. (The latter alone is another phenomenon as Bongowood, or rather Tanzania’s Hollywood is reeling to burst onto the global scene).

Also Read: Africa’s entertainment industry: The Golden Egg of the Continent’s economy 

IROKO’s plans for Africa

Nollywood, The Exchange (www.theexchange.africa)
Photo Source: https://www.independent.ng/

 

IROKO isn’t entirely giving up on the African market, instead, think of it in stealth mode. Due to its dominance over the past eight years as one of the strongest independent SVOD companies in Africa, it is hard not to see the company in pole position to benefit from any improvements made on the continent.

That said, IROKO makes 80% of its revenue outside Africa and listing on a foreign exchange will help consolidate its efforts. 

For Njoku, the Nigerian Stock Exchange or other local exchanges do not have a history of listing early-stage tech companies; therefore, the London Stock Exchange makes more sense in the short term.

IROKO is also seeking a market cap of about $100 million, which is small for the primary market. 

This is why the media company is choosing to list on the Alternative Investment Market (AIM) of the LSE.

Also Read: Why the pandemic made digitization in Africa a recipe for success? 

A sub-market of the LSE, the AIM is built specifically for small-cap companies. Still, there are plans in the future for IROKO to progress to the main market as its valuation grows — something U.K. sports betting company GVC and online fashion retailer ASOS have done in the past.

Most companies when going public tend to raise more money than their private equity days.

But it’s quite different with IROKO. The company, which secured around $30 million in total with its last priced round (Series E) in January 2016, plans to raise less or a similar amount when going public in 2022.

When IROKO sold ROK Studios to Vivendi-owned Canal+ in July 2019, the terms of the deal remained undisclosed.

alternatetext

But from the CEO’s statement, an estimate of the acquisition could be around $30 million. What’s particularly impressive is that the proceeds from the deal likely sustained the company through a rough patch in 2020 and might well do so after its IPO in 2022. 

Joining IROKO in plans to go public within the next two years is Interswitch, a Nigerian-based payments company valued at $1 billion.

But unlike Interswitch, which was founded in 2002, IROKO has been operating for just 10 years.

Within that time, the only internet company to have gone public is Jumia, and it did so after seven years. 

IROKO is expected to achieve this feat in its eleventh year of operation and Njoku, who holds an 18% stake in the company, believes it’s enough time to take the next step.

Also Read: Why Innovation Is Africa’s Most Exciting Story 

 

 

Tags: entertainment in africaIROKO Partners LimitedIROKOtvJason NjokuJumia stockLondon Stock Exchange (LSE)London Stock Exchange (LSE) Alternative Investment MarketNollywood

STATE OF ECONOMY - GET THE REPORT

ASSESSING EAST AFRICA

Loading...

Mustapha Juma

Talented and immensely creative journalist with a commitment to high-quality research and writing with over 5 years of professional experience. Dedication to sound investigative research methods and a strong desire to know the truth of the matter. Excellent reporting and interviewing skills and award-winning writing techniques. Experience writing and reporting across a variety of platforms, including Opera News Kenya, DailyActive.info, LitKenya.com and Scooper News

Related Posts

www.theexchange.africa
Business

Kenya: Food, oil prices force average inflation to rise to 6.3% in first half of 2022

July 5, 2022
www.theexchange.africa
Business

Bolt opens Africa head office in Kenya following $716m funding

July 4, 2022
www.theexchange.africa
Business

Kenya: Funding to support reforms in country’s blood transfusion services grow by 738%

July 4, 2022
Next Post
upcoming South Sudan Oil & Power 2021 Conference & Exhibition in June

South Sudan: The Dawn of a New Era

pewediepie

PewDiePie Net Worth 2021 | His Career And Success Life

PHOTO/Courtesy

Jumia Stock Price: Why investors may be losing out?




This months edition

Features

Countries

Era of the African Passport: A mixed bag of opportunities?

by june njoroge
July 4, 2022
0

The African passport is a common passport document that is set to replace the existing nationally issued AU member states’...

Read more
Sibongile Thobakgale. She is the area sales manager for South Africa at Aggreko Africa. www.theexchange.africa
Investing

Transforming manufacturing in Africa

by Opinion
July 4, 2022
0

From cement to food and beverages to metal production and processing, manufacturing organisations are looking for sustainable energy solutions to...

Read more
Wallace Manyara. He is the Business Development Manager, Region South & East Africa, Wärtsilä Energy. www.theexchange.africa
Investing

Renewables, gas cheapest ways to meet Mozambique’s electricity demand

by Opinion
July 1, 2022
0

To meet its growing energy needs and increase electricity access across the population, Mozambique must build 1.3GW of new power...

Read more
By 2030, tech financing in Africa will hit US$90 billion. African governments have a lot to do to reduce the risk of investing in tech startups. www.theexchange.africa
Tech & Business

Challenges and opportunities across Africa’s tech ecosystems

by Njenga Hakeenah
July 4, 2022
0

In addition, governments have to make things better for businesses. Currently, tech start-ups have to pay a lot to comply...

Read more
Foreign Currency Auction System Fails to Meet Soaring Demand
Industry and Trade

Foreign currency auction fails to meet soaring demand

by Laurence Sithole
July 4, 2022
0

Despite these fundamentals, the Zimbabwe dollar has continued to slide against the United States dollar prompting the government to take...

Read more

News

Banking
Industry & Trade
Investing
Money Deals
Regional Markets
Tech & Biz
Opinion

Countries

Kenya
Tanzania
Uganda
Burundi
Rwanda
Southern Africa
Ethiopia

More

My Account
Contact us
Advertise
About us
Help Center

Subscribers Center

E-paper
Premium Stories
Education Rates
Corporate Subscriptions
Weekely Newsletter

  • My account
  • About us
  • Advertise
  • Contact
  • Privacy Policy
  • Refund Policy – The Exchange
  • Sitemap

No Result
View All Result
  • Home
  • Banking
  • Industry & Trade
  • Investing
  • Money Deals
  • Regional Markets
  • Tech & Biz
  • Countries
  • Opinion
  • Login
  • Sign Up
  • Cart

© 2021 The Exchange - Powered by MediapixManaged by Supported by Digihandler,

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In