Headquartered in Nigeria, media company, IROKO, is set to enlist on the London Stock Exchange (LSE) ‘s Alternative Investment Market (AIM) before the end of 2022.
AIM is a sub-market of LSE, and it is built for companies with small capital, such as IROKO who is still seeking a market cap of $100 million — an amount that is considerably small for a primary market.
According to a reliable source, the media company aims to raise between $20 million and $30 million while valuing the business upward of $80 million.
In comparison, the company is raising lower than or perhaps around the same amount as it raised during equity days.
Of course, this is quite unusual as most companies, when going public, tend to raise more money than they did in the past.
Regardless, the company is still optimistic about progressing to the main market, expecting that its listed valuation grows bigger.
Wikipedia: Jason Njoku, Co-founder and CEO of IROKOtv
More so, Jason Njoku, Co-founder and CEO of IROKOtv – who currently owns about 18% stake in the company – thinks there is no better time to go public.
“We don’t need more. To be honest, $10 million to $15 million will be for corporate development; the rest will be secondaries for shareholders.
“As a private company, IROKO’s valuation was never priced above $70 million so anything in our target range wouldn’t be a down round at all,” Njoku said.
Speaking to a known source, Njoku disclosed that discussion with brokers is ongoing.
The latest disclosure also reaffirms Njoku’s hint – back in 2019 – about going public on either LSE or any local exchange market in the home continent.
Until now, the company has kept mute about its public listing plans, mostly due to the unprecedented COVID-19 pandemic.
You will also recall that the company dealt with a series of performance crises during the “tumultuous” year (2020), leading to IROKO switching to a passive operation mode in Africa.
However, it appears as though the company is confident about proceeding with its initial plans now.
IROKOtv had to switch game plan
If there were anything to learn from corporate organizations during 2020, it would be the ability to make strategic and timely decisions on the go.
For IROKO, the years were a mixed reality as they experienced both the positive and negative impact of the COVID-19 pandemic.
At the early stage of the COVID-19 outbreak in Q1 2020, IROKO suffered much in terms of low subscription, which stemmed from the impact of the nationwide lockdown order.
As you may have witnessed, people tended to spend most of their income on necessities and medicine.
Unfortunately, streaming service subscription does not fall in this category for most Nigerians and Africans.
Hence, IROKO Tv hit a slope and struggled to meet their set goals.
“Consumer confidence started ebbing, then completely collapsed. We spoke to thousands of our customers to understand what was happening.
People were fearful; people were losing jobs. Entertainment is important, food is essential,” Njoku wrote in a statement at that time.
More on IROKOtv’s woes in 2020
As if that wasn’t enough, the company had to also deal with low productivity.
This was due to the company laying off about 47 outbound staff.
This further plunged the productivity score of outbound staff from 54.3% at the early stage of the lockdown in April to 41.4%, 30.4%, and 25.9% in May, June, and July, respectively.
Source: Founder360
Finally, Nigeria happened to IROKOtv; Naira devaluation wasn’t favourable for the media company’s subscription module.
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Way back in 2015, IROKOtv charges $2.5 for subscription; then the Naira to USD exchange rate stood at N166/$1.
Fast-forward to Q2 2020, the exchange rate plunged to about $384/$1; forcing the company to increase the subscription fee to about N2, 420 (approximately $6.3).
However, this constant naira devaluation has affected the media company over the year; restricting it from meeting up with set projections, among other impacts.
To address all of these, IROKOtv, first of all, cut down its operational cost and subsequently switched to a passive mode in Nigeria while focusing on other active market destinations.
IROKO will become another Nigerian company to go public
Having survived 2020, revisiting its plan to list on LSE is undoubtedly a good one.
Interestingly, the media company will join Jumia, which has also gone public in recent times.
Currently, IROKO and Interswitch, a Nigerian-based payment company valued at $1 billion, are the two Nigerian companies planning to go public within the next two years.
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In comparison, IROKO will be achieving this feat in its 11th year; whereas Interswitch has existed for about two decades.
“What we can achieve in private, we can equally achieve as a public company.
“We will likely open up the IPO to our loyal members too so they can capture the value too; which I am super excited about.
“One thing about IROKO is that we have always been pioneers and we’re okay being super experimental.
“I plan to open-source the entire process so any other African company coming behind; if we’re successful — will benefit from our experience,” Njoku said when asked about the journey ahead.
and then