Jason Njoku writes: Who says iROKO is dead?!

by Jason Njoku


iROKO will be here in the next 5 years. $8Mn and my revenue growth over that period guarantees that. We have institutionalised and survived too many things over the last 3 years to not be strong enough to combat any and everything.

So we announced a new chunk of money. Cause for celebration you would think? Yes and No.

What has surprised me the most about our recent fund raise is people’s surprise locally (read Nigeria) at our health and apparent ability to actually raise money. It appears most people suspected iROKO was on its death bed. I guess the iROKING saga wetted peoples appetite for iROKO’s imminent death.

Consequently the announcement mutated into something of speculation and conspiracy. Bastian and I no longer own the company! Tiger Global are poised to fire them! We raised the money to pay off debts! Why are there no new investors? Who’s this Rise Capital? But isn’t a valuation ~$50Mn too small (imagine)! Is it a ruse to dilute the MTN/Rocket deal! This is a covert way to buy more companies for Spark! Wait, what?! How?

The juxtaposition is we were featured in The WSJ, Techcrunch and Forbes whom lauded this as a true African internet success story. The actual players in the technology and media space globally and locally have been emailing me to congratulate the monumental achievement. The general industry consensus is one of excitement and amazement. How many venture backed companies EVER raise more than $20M? Globally? Let alone in Nigeria.

Local Signals of Success

Is it that Nigerians value the wrong signals of success? The adage, you have to fake it to make it.Throughout yesterday I pondered the fundamental nature of that question. Were the whispers enough to take away the ‘small success’ from a little company which has become significantly larger? How many of said whisperers had even seen $100,000? To critique $8Mn. No. Perhaps it was me. Perhaps I just generate mad hate and disgust at my obvious luck and lack of intelligence. Or perhaps it’s witch craft.

Over the weekend I was at a club with my people trying to celebrate my 33rd birthday. I was wearing a pair of jeans and a £6 black M&S t-shirt. I sat at a table with my guys and the waitress tried to bounce us. Literally picked up our drinks (Henny and water – it was early in the night) and walked off with them. She looked at me and told me to move, orcefully, and that the table was ‘reserved’ for some ‘celebrity clients of theirs’. I didn’t argue. But I didn’t move. There was zero obvious sign of success on my person. I don’t own a watch, chain or nice clothes. I was wearing black plimsoles so no fancy footwear to give it away. Nothing. The owner is someone I know but I didn’t bother to pull rank. Let her know who I am! It wasn’t her fault. In Nigeria everyone tries to appear rich. Most people pretend, most believe in the Fake it until the make it theorem. So the cosmetic trappings of success appear to mean success itself. By the end of the evening she got the picture.


The moral of the story is for most startups in the early years is that the most obvious signals of success aren’t actually useful. Vanity metrics reign supreme here. The earlier they come to you, the more success and failure look very similar. I would read the negativity and open questions of ‘structural problems’ at iROKO. Look at the daily revenue numbers and marvel at the disconnect. We have reduced the team and still every month we generate larger and larger revenues.

Signals of failure.

We don’t owe anybody. I have prided myself on never owing any producers or anything of the like in Nigeria. EVER. Unless there is a dispute, where we withhold payment pending resolution, no employee or human being can ever, EVER, say that iROKO has underpaid or delayed their money without reason. EVER. In Nigeria the signals of companies’ impending failure are usually when they start delaying their employees salaries or payment to suppliers. In iROKO’s case that has never been an issue. Before the money hit my account yesterday, iROKO still had seven figure USDs in our bank accounts globally. So imagine my surprise when people thought we were about to go. Apparently we were supposed to die, it had been written. We raised $8Mn. What most won’t know is I actually opted not take an additional $11Mn a few weeks ago because of the impact on our negotiated shareholders agreement was something I couldn’t live with. Hence the sum could have been at least double what we raised. EASILY. But I opted not to do it.

Unit Economics

I have invested in 10 companies in Nigeria via Spark. I largely understand the approximate unit economics of most of the other large funded startups in Nigeria and Africa. I speak directly to the founders after all. No need to speculate. Just pick up a phone and make a call. My unit by $/Naira/£ unit economics are some of the best in Africa. Our quality of revenue is just abnormally high. That’s why markets love dependable, linear subscription and / or frictionless revenue business’. Assuming normal growth and without any catastrophes in 2014, I can today to the nearest $500k predict what our revenue will be for next year. For us to grow we need to add millions to the bottom line. This is not normal revenue. It’s super high quality in its frequency and linearity. With obese gross margins. In the next few years we expect to double revenue. In order to do that we probably only need to add 10 people. MAXIMUM. That takes us from ~70 to a maximum of 80 people. iROKO will never really be a business which requires hundreds of employees. Our revenue scales unevenly.

Some would say this is me lying or gloating. But I feel I am simply setting the record straight. Separating the signal from the noise. Telling it how things are.

iROKO will be here in the next 5 years. $8Mn and my revenue growth over that period guarantees that. We have institutionalised and survived too many things over the last 3 years to not be strong enough to combat any and everything.

As a private company I can’t share everything and have to explain nothing. But I like writing. I enjoy telling my stories. We are only a sum total of our stories and experiences. And boy have I many more to tell.



Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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