IROKO, A Nigerian-based media company, may file on the London Stock Exchange (LSE) alternative investment market to go public within the next 12 months..
according to this Report good, The media company will raise the company between $ 20 million and $ 30 million to a value of $ 80 million to $ 100 million.
In October 2019, Njoku Indicated This company was going public on either the London Stock Exchange or a local exchange on the continent.. HoweverThe following year, the CEO muted the entire process What a big reason it was for the company.
In 2020, the company had plans to increase average revenue per user (ARPU) in Africa from $ 7-8 to $ 20-25 for its video-on-demand service, iROKOtv.. During the first four months of the year, it appeared that IROKO was determined to achieve. But amid epidemic-induced lockdown fears, consumer discretionary spending in Nigeria and other African markets plummeted. There was a 70% drop in membership numbers and in May, 28% of the company’s employees Went on unpaid leave. But unlike the number of iROKOtv local markets, its international customers rose 200% during the lockdown, hitting the $ 25-30 ARSU range..
However, More bad news came in August when the CEO announced that the company was closing 150 people. Njoku cited the naira devaluation, regulated by the nation’s broadcasting regulator, and behind this decision is a low outbound marketing team..
With the company spending $ 300,000 or more every month on development, it decided to stop Any scaling effort on the continent. Instead IROKO focused on its international market, Mainly US and UK where it is able to execute a 150% price increase from $ 25 per year to $ 60 per year. Njoku said the decision left the company directly in a strong cash position, as it had been for years..
“What was the cost to pursue Africa’s development Really Resized Dramatically. We were focused on defending Africa and basically Is not doing anything Zero marketing or anything to drive, ”he told TechCrunch. “We are back to focus on where our economics really lie. Our international trade Organizedly There has been a double-digit growth in 2020 and we expect it to continue that way for the future. “
IROKO is not Completely Instead, think about giving up in the African market. Due to its dominance as one of the strongest independent SVOD companies in Africa over the last eight years, it is difficult not to see the company in pole position benefits from Any improvements made on the continent.
Having said that, IROKO makes 80% of its revenue outside Africa and listing on a foreign currency would help. to consolidate Efforts to. For Njoku, there is no history of listing early-stage technology companies on the Nigerian Stock Exchange or other local exchanges; So, 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 LSE. A sub-market of LSE, AIM Is made Specially For small cap companies. Nevertheless, IROKO has plans for the future As the progress to the main market increases its valuation – some UK sports betting company, GVC and online fashion retailer, ASOS have done so in the past.
Most companies, when public, raise more money than their private equity days. But it is quite different with IROKO. The company, which achieved a total of $ 30 million with its last price round (Series E) in January 2016, plans to raise a similar or similar amount when it goes public in 2022.. Seems like a down round, I asked Njoku why the company is not planning to raise more?
“We don’t need any more. To be honest, there will be $ 10 million to $ 15 million for corporate development; The rest will be secondary for the shareholders. As a private company, IROKO’s valuation was never more than $ 70 million, so nothing would fall short of our target range. “. “Especially if you consider that time, we excluded ROK from the total amount of capital raised for IROKO; We have already returned $ 11 million to the initial investors and shareholders. We still have physical capital left from ROK-Canal + acquisitions coming every 6 months until 2023. “
When IROKO sold ROK Studios to Vivendi-owned Canal + in July 2019, the terms of the deal remained unknown. But from the CEO’s statement, one estimate of the acquisition could be around $ 30 million. Particularly impressive is that the proceeds from the deal retain the company through a rough patch in 2020 and may do so after the IPO in 2022..
IROKO is to be included in the plan to go public within the next two years Introverted, A Nigerian-based payment company Value of $ 1 billion. But younlike interswitch, which Was established In 2002, IROKO has been operating for just 10 years. Within that time, the only Internet company Jumia in public, And seven years later it happened. IROKO hopes to achieve this feat in its 11th year of operation and Njoku, who holds an 18% stake in the company, believes there is enough time to take the next step..
“What can we achieve in private, we can uniformly Acquiring as a public company. We will likely open an IPO for our loyal members so that they too can capture the value, which I am super excited about. One thing about IROKO is that we have always been a pioneer and we have been properly super experimental. I plan to open up the whole process so that any other African company comes back – if we succeed – at will benefits from our experience,“He said of the journey ahead.