Jason Njoku (extreme right) |
Iroko Partners, an online distributor of African movies and music, has raised another $2 million in its latest round of funding from a Swedish venture capital group as it seeks to take the service to cable and satellite TV partners in the U.S. and Europe.
The Lagos, Nigeria-based company raised the funds from Swedens Kinnevik, an early investor in Groupon Inc. Iroko previously raised $8 million from U.S.-based hedge fund Tiger Global in April as investors in emerging markets seek to tap into one of the fastest growing movie businesses in the world.
Kinnevik investments head, Henrik Persson, said his firm, which has invested in African telecoms, sees tremendous opportunity in African media and online services. It has very low penetration and we see a really strong growth trend. He added: A part of our investment philosophy is that we think that the perceived risk is higher than the real risk in this market..what people see as a lack of opportunity is a lack of supply.
Iroko has focused on forming partnerships with most of Nigerias leading filmmakers for distribution on its own platform as well as with major partners like Google Incs YouTube.
Though the majority of Irokos operations are based in Lagos, it also has set up offices in London and New York.
The Nigerian movie industry is now widely acknowledged as the third largest after Hollywood and Indias Bollywood in terms of the number of movies produced. While so-called Nollywood movies are typically distributed within Nigeria and around the world on DVD or Video-CD discs, Njoku spotted a gap in the market to digitize the movies for online distribution. Most of the Web viewers have been in developed countries with fast-enough Internet traffic speeds to enable video streaming.
The companys revenues are predominantly generated through advertising around the movies. But in July it launched a monthly subscription with the promise of earlier windows for fans to catch new films without advertising.
Njoku said the new funding will focus primarily on helping expand operations outside Nigeria. He said the next stage for the company is to find ways of licensing its partners content to cable, satellite TV companies and international airlines.
The Internet is one of the most poorly monetized platforms for content, said Njoku. Since were platform-agnostic it would be mad for us not to try and form relationships with TV.
Iroko sees itself as a global business with pan-African roots so it is also looking to license more movies and other content from around Africa from countries like Ghana and Kenya among others.