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Inside iROKOtv’s plans to go public

Inside iROKOtv’s plans to go public
By get.Africa Weekly • Issue #56 • View online
Utụtụ ọma,
That’s “good morning” in Igbo
Jason Njoku made history in 2013.
At 32, the iROKOtv cofounder became the youngest person to be named the Growth Ambassador for Nigeria’s Alternative Securities Market (ASeM).
ASeM is a sub-market of the Nigerian Stock Exchange (NSE). It lists small and mid-sized companies with high-growth potential. In other words, companies that are ready to go public but not yet big enough to get listed on the main exchange.
Since then, both Njoku and iROKOtv have grown immensely. The streaming company is now due to be listed on the London Stock Exchange’s Alternative Investment Market (AIM).
AIM is a sub-market of the LSE. It’s for companies that are ready to go public but not yet big enough to get listed on the main exchange. 
But just how ready? 
According to Njoku, discussions with brokers will start in the coming weeks. 
Here’s part of what they’ll consider:
  • Operations: Founded by Jason Njoku and Bastian Gotter in 2011, iROKOtv boasts the largest online catalog of Nollywood film content globally. This podcast goes in-depth about their history. 
  • Last fundraise: $30 million Series E in January 2016.
  • The goal: The company aims to raise between $20m and $30m, which Njoku says will increase its valuation to between $80m and $100m. The listing should happen in 12 months.
Home and abroad 
iROKOtv is now in a position to be listed on the NSE’s main exchange. Choosing to go with the alternative bourse of an international exchange is, therefore, a noteworthy decision. Although, not everybody will agree it’s the correct one.   
A couple of years ago, Senegalese VC investor Marieme Diop suggested that instead of companies chasing the waterfalls of international listings, they should stick to the rivers and the lakes that they’re used to back home.
“It might be a better option to set lower revenue expectations and have startups list on local exchanges to raise capital from IPOs when they’re ready. We may be able to create more gazelles at home than unicorns abroad.”
A gazelle is typically a tech startup valued at $100 million or more and generating revenues of $15 to $50 million.
But on the flip side, are local exchanges like the NSE an attractive proposition for these companies? Can the NSE birth a company the size of Egypt’s Fawry?
This report on the performance of Nigerian tech stocks during the March 2020 lockdowns highlights some worrying trends:
  1. Low performance: There isn’t significant trading activity on the majority of tech stocks and many companies have seen their valuations tank after getting listed. 
  2. Legacy tech: Software-based, VC-backed tech companies are underrepresented on the NSE, which could be as a result of a paucity of exits in recent years but it could also be as a result of #1. 
Either reason should be a cause for concern for the NSE. Although, being that he’s no longer their Growth Ambassador, it is no longer one for Njoku to be concerned with.
In under 10 years, iROKOtv has grown from being courted by ASeM to preparing to list on AIM. And maybe, just maybe, dual list on the main NSE in the future.

get.Africa is a weekly roundup of the most interesting stories in African tech. To support, follow us on Twitter, subscribe to our YouTube channel, share this issue or send us an email. You can also check our archives.
Credit: Jayden Brand (@jaydenbrand)
Credit: Jayden Brand (@jaydenbrand)
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