Nigerian-based video-on-demand and internet TV startup, iROKO, announced on Monday that it had raised $19 million in content development and capital funding.
This new funding pushed the amount raised by the fast growing African startup, since it was founded by serial tech-entrepreneur Jason Njoku in September 2010, to more than $40 million, according to Tech Cabal.
It also highlighted the growing interest by investors in the video-on-demand (VOD) business in sub-Saharan Africa, which now has more than one billion consumers with most of them entering the middle class segment.
Africa’s VOD market has been growing fast in recent years as mobile phone subscriptions boom on the continent. This lucrative market has attracted international companies including US-based Netflix that entered the continent this year in a global expansion strategy.
AFKInsider spoke to Njoku, iROKO’s founder and chief executive, about his company and how the VOD market is shaping up across sub-Saharan Africa.
AFKInsider: Which African countries are a target for iROKOtv to expand to?
Njoku: iROKOtv is already global – in Africa, we have an Android app which is download only in due to the challenges of quality internet across the continent. In the West, we still have streaming functionality, but the app is gaining in popularity too. As part of this current expansion, we are looking to focus more intensely on Africa though, investing even more in making our own content. We also want to reach out to different audiences in Africa, so are planning on dubbing our content into French, Swahili and Zulu.
AFKInsider: Will you be looking for more funding any time soon?
Njoku: Not for the foreseeable future, I don’t think. We are a whisper away from being cashflow positive – that is an exceedingly exciting milestone for us.
AFKInsider: Has anyone ever offered to buy iROKO? And would you consider if someone did?
Njoku: We had offers from the very early days – iROKO was, and in many ways continues to be, a fairly unique prospect. No, I’ve not been tempted to sell the company, there’s still so much we want to do in building the company out and reaching its potential
AFKInsider: How has the VOD market changed both in Nigeria and the rest of the continent since you founded iROKO in 2010?
Njoku: At last count, I believe there were over 130 registered African VOD platforms on the continent. When we started out, it was just us. So digital content distribution and VOD has proliferated, and watching content has improved somewhat, but not to the extent that we would’ve liked, which is why we decided to turn off the streaming element of iROKOtv in Africa in 2015 and pivoted to a download-only model.
AFKInsider: What are the opportunity in the Nigerian and African market for iROKOtv?
Njoku: The market for us is local content, and leading millions of viewers to it. We don’t believe we’ve even really started yet, in terms of connecting movie fans to their favorite form of entertainment. In just the same way the streaming services in the West have become household names and brands, we plan for nothing less for ourselves in Africa.
AFKInsider: Is Netflix entry into Africa a game changers? How will it affect VOD startups like iROKO?
Njoku: Yes and no. Yes, their entrance is exciting and it shows that they understand the potential of the market, but don’t forget that Netflix didn’t ‘just’ launch in Africa. They launched in 130 countries in one day, most of whom enjoy better broadband and digital infrastructure than we do here. The announcement of their coming to the continent was not unexpected, perhaps just a little sooner than many had predicted. Netflix is building for the world, we are building for Africa, however their entrance into the market will, I think, force the hand of some of the smaller VOD players on the market and make them up their games a bit.
AFKInsider: What are your plans for iROKO in the next five years?
Njoku: Content, content, content – we will be ramping up production considerably, so that we own a majority proportion of our catalogue. Local first. We will also need to build a world class app, that is the go-to platform for movie fans on the continent so we will certainly also be spending the next few years building out our engineering teams as well.
AFKInsider: What’s the outlook on the VOD market in sub-Sahara Africa?
Njoku: It has only a positive growth trajectory, although the pace of growth is heavily influenced by the continent’s broadband infrastructure. But the VOD/ mobile TV industry has the potential to be Africa’s most prominent entertainment platform within a generation. That is an outlook I’m looking forward to realizing.
