If he had not taken the next flight out for urgent medical attention abroad, Sim Shagaya may not have been in a position to gladly witness the hand-over of Konga to Zinox and Leo-Stan Ekeh this February.
Much is being made of how the sale, reportedly valued at $20m, represents a failure of administration. Some are crying fraud, others citing mismanagement. Many who are not privy to the frustrating roadblocks in Nigeria’s e-Commerce industry see the ‘end of Konga’ as symptomatic of how badly businesses and start-ups are run in the country. It has probably helped their case that OLX has come under the knife within this period, closing shop in Nigeria.
But far from being a tale of doom, every young entrepreneur should have nothing but positive lessons to take away from the transfer of ownership of Konga. This is not the “end” of the company and it was not sold because it was dead or dying. Being the kind of entrepreneur he has been, no one should expect Mr Ekeh, the giant of Zinox, to buy a company on the decline.
On the contrary, Konga has been acquired by a company which recognizes that what Mr Shagaya and his successor, Shola Adekoya, built over the years has purpose, potential, and should have a more formidable support that it has been able to enjoy over the past 5 years. Anyone who knows that Amazon only started hitting profits in 2016 – nearly 20 years after its founding – will know profitability was not Konga’s weakness. The gem of the brand was in its bespoke softwares, in its delivery service, its pay platforms, but most importantly, the vision of its administrators to drive the development of a nation through the ease of commerce.
Their dreams were valid, and it is this recognition that has led to a successful transfer of ownership to another company with the Might to keep it alive. The stick given to Mr Shagaya for not having “fight” comes from a place of misunderstanding about what constitutes right exit. But as tech industry analysts and practitioners such as Victor Asemota have observed, the Nigeria tech business market needs “more exits to local players”, affirming the Konga acquisition by a local company “as a massive success and vindication of the local ecosystem”. To those who read this sale as the foul smoke of an environment bad for business, Asemota thinks we should in fact look forward to “more potential acquisitions/exits”.
We know Sim could have given his life for his firm from the accounts of morale beneficiaries of his, like Oluyomi Ojo of Prinitivo, whom he inspired and shared wisdom while beginning their own entrepreneurial journeys. “Beyond what has happened to Konga, Sim has added more to the future of tech and entrepreneurship in Nigeria” Ojo wrote in a post that extolled the broader philosophy that founded and made Konga one of Africa’s largest online commerce outlets. Without those rare humane qualities that are sometimes vilified as alien to aggressive capitalism, it’s hard not to see that, dealing with inherently “Nigerian challenges” in running any enterprise, there would not have been anything to handover to Zinox this year after the kind of 2015 – 2017 most businesses had.
With its superior financial strength, and remaining true to the value proposition of the Konga of Shagaya’s vision, Zinox should be able to overcome some of the challenges that bugged the e-Commerce start-up. It will largely be up to the new owners to make sure the new Konga is successful. They must know what they have bought is, without exaggeration, a number of times better than what they already have. Perhaps the software solutions coming with the new kid will be used to boost the capacity of the resident.
But whatever will be its future, the successful sale will, referencing Bloomberg analyst Oluwatosin Olaseinde, be a signal “to the international market that there is a valid exit strategy should they invest”. In a word, Nigerians can now build brands worthy of local envy, investment and bid for acquisition.
Mr Shagaya and Konga have not “bottled it” by “giving in”. They developed a great product and service which did not wither in their hands. Far from that, they transferred it to another capable owner in the best shape since its founding. The question now should be about the next big thing they create.