You know that thing they say, there’s an element of truth in rumors, that was my thought at equilibrium when a friend whispered a ‘big’ deal, arguably one of the most influential tech acquisitions to surface the African ecosystem. I waited for Osarumen of Tech Cabal, the dude is really connected and a top notch Linda Ikeji for those involved in those kind of things but nothing happened.
Oh something happened, it had to do with me finding a tweet, the single multi binary answer I needed to jump into conclusions, it was from Sim Shagaya, Founder of Konga – Nigeria’s largest e-commerce venture; short and spooky but where I come from, they like to say ‘if you know, you know’.
I wish you success with @ShopKonga, @LeostanEkeh. Here's to new beginnings!
— Sim Shagaya (@SimShagaya) February 3, 2018
Once we had predicted on Twitter, even twice at a google hangout during my days at Jangilova, about how the future of online shops was going to be a merger of Jumia and Konga, what we didn’t see coming most especially on the week of black panther’s premiere was the override of one (or the two in the near future) by one of the ecosystem’s background venture, Yudala– an online and offline retail chain spreading its wings across Africa. I used to think it was owned by super rich kids with nothing but loose ends, it only happens that the uprising venture is affiliated with Leo Stan Ekeh, the gem behind Zinox computers.
Zinox Group, which is one of Africa’s biggest technology conglomerates would assume ownership of the e-commerce platform, Konga.com, which remains one of the biggest players in the sector; KOS-Express, the world class logistics arm of the business and KongaPay, the company’s integrated mobile money payment channel with over 100,000 subscribers.
The news of Zinox acquiring Konga tells me one thing. Structure your business for a marathon not some orgasmic sprint.
— Daniel Iyam✒ (@danieliyam) February 3, 2018
Between 2012 and 2014 Kinnevik dropped circa $80mill on Konga. Naspers $40mill Series C valued it at $200mill. Fast forward Q1 2018 and Zinox/Leo Stan Ekeh walks in and pays $10-15m to acquire it. I look forward to commentary on this deal
— Michael Ugwu (@iam_magicmike) February 3, 2018
I wish I could categorically tell you the fixed price on this bill, but twitter banter and DM slanders suggest it’s lower tens. While some even argue that the exact amount is $10 Million (Konga got funded over $100 Million), others say that Konga was gifted to Zinox as a result of cash burn. If that happens to be the case, then Sim, Segun and konganians really owe us a national live broadcast on NTA, if not for the paparazzis that follow exits but for young aspiring entrepreneurs learning to do business in this not-so-businessly place.
Just as a twitter user said, the unprofitability of the online market or e-commerce in Nigeria is a very interesting case study of why sound business strategy must be local. Which drags us to push the question an entire ecosystem has conveniently dodged, whether the burgeoning tech industry is early enough to be profitable. In the past few days, other notable founders like Jason Njoku of iRokoTV, Mark Essien of Hotels.ng and Oluyomi Ojo of Printivo had published pieces on Sim’s efforts and support in building and connecting members of the ecosystem to international opportunities and investments. In common, they all seem to agree that Sim is a great guy as well as very tactical and strategic in his moves, it only leaves an aspiring entrepreneur like me and many others with wishful lips about why DealDey, Konga and GoMyWay, three companies Shagaya is closely associately with have all crashed out of business. It is easy to deduce amidst the brouhaha and ‘spicement’ that there are only a few graduating startups since after the first badge of heavy fundings. The numbers have always come out asking but the already mature industry is still trying to fit into gain shoes. Many will even go as far as arguing that the acquisition by Zinox is not due to Konga’s failed strategies, but Zinox eye on the e-commerce market share covering sub saharan Africa. And so Ugoh Tersur ended by saying ‘to project loss for Konga may be a misrepresentation of the actual facts’.
Meanwhile Yudala, a company that emerged in the 2015 post zuckerberg bloom with a rocket ambition of becoming the market leader of trade and commerce in the continent, founded a Nnamdi Ezeh who happens to be the son of Zinox’s boss. Nigeria’s TechPoint reports that despite the acquisition, there won’t be a merger between Yudala and Konga but it’s best to believe that only time will tell.
We can only wish all the parties involved the very best and quick growth for the Nigerian consumer internet community.