• Sunday, July 14, 2024
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iROKOtv investors back ‘Netflix of Africa’ with $19m funding

Jason Njoku iROKO CEO

iROKOtv, the mobile entertainment group dubbed the Netflix of Africa, has secured $19m from investors including France’s Canal Plus to produce original content and expand across the continent.

News of the funding provides further evidence of investor interest in the region’s mobile technology start-ups, given the wide use of Smartphone’s to access online services, rather than personal computers.

By 2025, half of sub-Saharan Africa’s 1bn-strong population will have internet access, with 360m connecting via Smartphone’s, according to McKinsey, the professional services firm.

iROKOtv said its new investment will go towards financing and producing local content, and backing its product and engineering teams in both Lagos, Nigeria’s biggest city, and New York.

It will aim to produce at least 300 hours of original content in 2016 and to double that by 2018.

Having first launched in 2011 as a free-to-watch streaming website for Nigeria’s “Nollywood” movies — the world’s second-largest film industry by output — the Lagos-based group has since shifted to a “mobile only” subscription app strategy.

Subscribers download an app and pay a monthly fee to watch unlimited movies.

“For us, there is no version of reality where the marriage between Africa’s most powerful communications tool [mobile] and the most prolific and loved entertainment provider [Nollywood] won’t be a joyous union,” argued Jason Njoku, chief executive and co-founder of iROKOtv. “With millions more Africans poised to come online via mobile in the coming years, our mission is to lead viewers to content they’ll love.”

Although smartphone data usage is still expensive in many African countries, costs are coming down rapidly, in line with the price of Smartphone’s. In Nigeria, Africa’s biggest economy, some Chinese-brand devices retail for the equivalent of less than $40.

Even so, iROKOtv has developed its app to stream films on low bandwidth so as not to deter customers who cannot afford large monthly data packages.

While many of its 65,000 subscribers are in the African Diaspora, not on the continent, iROKOtv faces competition from Netflix, which this month announced plans to enter 130 countries, including many African nations.

For iROKOtv the challenge will be to fight for new customers against Netflix. The California-based streaming video provider has 74m subscribers.

iROKOtv, which previously raised $25m from international investors including US-based hedge fund Tiger Global Management, declined to comment on the valuation implied by its fundraising.

But a spokeswoman said the new deal means that iROKOtv will be “cash flow positive within the next couple of years”.