Jan 26, 2016 ยท 4 minutes

I don’t know Jason Njoku as well as other entrepreneurs, but our life stories have a powerful intersection point.

He once helped me bribe my way out of a Nigerian kangaroo court and my story about the whole incident helped him raise his first major round of funding from Tiger Global.

That’s what you call a win win in emerging market entrepreneurship: Pregnant tech journalist lives; company gets millions in capital as a result. In emerging markets, it’s not about operating in a totally safe market. It’s about knowing how to operate in a highly risky market. And Njoku is a master at it.

Njoku is the co-founder and CEO of iROKO Partners, a video startup that streams Nollywood movies for the African diaspora. Nollywood is the third largest movie hub by revenues and the second largest by volume of films. And before iROKO there were few places the films could get distribution outside of DVD sales in markets or certain pay TV channels.

iROKO was even rarer in that it offered to pay comparatively generous licenses to producers to legally stream their movies. Its team would strip out copywritten music, subtitle it if necessary, and do other basic production steps to make it accessible for a wide online audience. They even plugged data into their own Nollywood IMDB.

It is a rough and tumble world. We were meeting with filmmakers in Alaba market when our trouble with the vigilantes began. “Don’t worry,” Njoku said at the time. “As long as I have my checkbook, they still need me alive.”

That checkbook continues to get bigger. iROKO announced yesterday it’s closed another $19 million in content and equity deals from France’s Canal+. Specifically, it’s $12 million in cash and $7 million in a content development budget. That brings the company to $36 million raised to date.

The deal may ensure iROKO survives in what’s looking like a brutal international funding year. Njoku says the market for funding in Africa is “terrible” now. And he was one of the more high profile ones. From an email interview yesterday:

We were very fortunate to have started this raise in the summer. I feel if we had started it now for example the outcome may not have been that rosy. The funding environment has basically disappeared. There are very few companies being funded in Africa. Many of the usual investors are not even active in Africa anymore. 

Not a shock: When Silicon Valley, Europe, and Asia funding gets the flu, Africa and the rest of the emerging world gets pneumonia. Njoku is doubly lucky to have raised money from the West: The Naira has had a huge devaluation over the last two years. “Those of us who hold dollars have significantly larger buying power,” he says.

More interesting than the cash, is the slimmed down version of Netflix’s playbook that iROKO is doubling down on with this funding.

Coincidentally, the news comes as Netflix itself is starting to enter Africa, causing some African press depicted it as a brewing battle. In theory the two are more likely to be partners than compete. iROKO is staying squarely focused on its vertical of getting Nollywood content out to the wider world, not say, bringing “House of Cards” or “Breaking Bad” to Africa. And one of the biggest growth areas for iROKO today is a content licensing business based in London which curates Nollywood content for larger corporate media companies. Njoku says it’s the biggest reason he expects to get cashflow positive in 2016.

That’s life in emerging markets: Don’t bet on a consumer market to grow fast enough to keep you alive, have a backup plan.

In general iROKO is migrating from trolling the chaotic Alaba markets with a checkbook in hand looking for content to license to owning the content outright. By 2018, Njoku expects to own 50% of all the content on its platform, with a goal of getting it to 80%. That’s important as new entrants come into the market and Nollywood grows in popularity. You don’t want to be the one to pioneer a market, only to get priced out of it by those with deeper pockets.

The content development piece is an interesting part of that strategy-- and similar to why Netflix started producing its own content: To control its own destiny and become less reliant on the licensing game. Like Netflix, iROKO is focusing on new Nollywood series, not movies. That’s more expensive initially, some $100,000 to $150,000 a pop, but the economics are more favorable in the long term, Njoku says. And it’s the big hole it the market, content-wise. “[Series] are the most under-developed area of Nollywood content,” Njoku says.

A ten-part series is a big commitment for the churn and burn, quick-hit Nollywood world. When we were in Alaba meeting producers “Dead at Last: Osama Bin Laden, Complete Season One: Life and Death” was on the shelves and Bin Laden had just been killed days earlier. $100k may be a single day catering budget on “House of Cards,” but it’s a big investment in Nollywood.

And like Netflix, iROKO has a trove of data on what movies do well and what its audience likes, and deep connections in the industry. Njoku himself is married to a well-known Nollywood actress.


I doubt Netflix and iROKO wind up competing anytime soon. But like all the best emerging market entrepreneurs, Njoku has certainly ripped-and-adapted from the Netflix playbook.