iROKOtv secures N1.3 billion funding for Nigerian VOD Platform

Currently, 50 per cent of iROKOtv’s audience is located in the U.K. and U.S.,

iROKOtv, the Africa-based movie platform for Nigerian movies, known as ‘Nollywood’, on Wednesday revealed a funding round of $8 million, about N1.3 billion, led by existing investor Tiger Global, with further participation from Sweden-based Kinnevik. It also introduced a new investor to this round, US-based Rise Capital.

This brings its total asset base to $21 million, arguably making iROKOtv one of the most well funded internet companies in Africa today.

iROKOtv is a leading Video-on-Demand, VOD, platform for African content and following the announcement of the $8 million investment, the company said it would continue to focus its attention on growing traffic, content curation and building a platform-agnostic distribution system for its one million monthly users.

To-date, the capital raised by iROKOtv has been used to acquire content, expand the London-based tech team, develop mobile websites and applications and open offices in London, New York and Johannesburg, alongside the company’s Lagos headquarters. The company now holds about the world’s largest online catalogue of African content, with over 5,000 movies.

The new capital would be channeled at buildings and transitioning the company’s audience from a primarily Diaspora base to an African base, as well as migrating from a largely ad supported model to more subscription service.

Currently, 50 per cent of iROKOtv’s audience is located in the U.K. and U.S., but with the continent coming online, demand for homegrown multi-platform video content is rising fast.

There will also be a renewed focus on monetizing iROKOtv’s catalogue through its SVOD service, iROKOtv PLUS, as well as through its strategic distribution partnerships with global airlines and TV channels.

Jason Njoku, CEO and co-founder says: “The $8Mn raised by Tiger Global, Kinnevik and Rise Capital will further fuel our expansion and help us to realise our long term goal of becoming one of Africa’s preeminent media companies. We started life three years ago as a Nollywood content aggregator on a YouTube channel and today we find ourselves with a VC-backed dedicated VOD platform, watched in 178 countries around the world, with one million unique visitors a month. These metrics were achieved with hard work from a great international team and today’s news allows us to continue in the same vein and accelerate our growth.”

Bastian Gotter, COO and co-founder says: “We have forged a niche in African movie programming and captured people’s imagination in terms of bringing previously unobtainable yet popular content, loved by millions, to a global audience on an awesome platform. This additional capital allows us to consolidate our position as VOD market leaders for Africa, invest in tech, content and infrastructure and, importantly, we are now in a position to become profitable by 2015, which is an extraordinary feat for any start-up, let alone an African VOD one like ours.”

Wednesday’s announcement also sees a new investor, Rise capital, brought into the funding series, with Gotter adding: “Nazar’s guidance as our first outside investor and active board member has significantly helped our development as a company, so we are excited to strengthen this relationship with him and the Rise Capital team. We look forward to continuing to benefit from their global investment expertise.”

Nazar Yasin, Managing Partner of Rise Capital says: “We are very pleased to participate in this round of financing alongside Kinnevik and my former colleagues at Tiger Global.

“Having worked with Jason, Mr. Bastian and the team since their early days, we at Rise Capital look forward to continuing to help them scale their content acquisition and distribution channels and secure their positioning as Sub-Saharan Africa’s largest and most impactful media company.”

Mia Brunell Livfors, President and Chief Executive Officer of Kinnevik adds: “This latest funding round for iROKOtv is testament to the fact that Kinnevik continues to support them on their journey to becoming one of Africa’s most exciting and far-reaching media companies”.

On July 1, 2012, iROKOtv introduced a subscription service, SVOD, on its site, iROKOtv PLUS, where for $7.99 a month, subscribers are the first to access the 12 brand new movies uploaded onto the site every month.

The iROKOtv PLUS business is currently growing rapidly and is now the largest single source of revenue for the company, revealing that more consumers are willing to pay for quality content. However, 95 per cent of content on iROKOtv continues to be free and is supported by an advertising (AVOD) business model.

Coined by the media as the ‘Netflix of Africa’, iROKOtv has successfully re-organised the multi-million dollar Nigerian movie industry’s distribution infrastructure.