NIGERIAN INTERNET BUSINESS INCUBATOR
By Paul Ndiho, Washington D.C.
Spark is a Nigerian-based internet business firm designed to support the successful development of entrepreneurial companies through an array of business support resources and services. The firm is investing up to one million dollars in the development of aspiring Nigerian tech and internet startups.
The arrival of the fiber-optic cable in West Africa has brought promises and expectations of a faster, more reliable, internet service. Nigeria has West Africa’s largest economy and internet connectivity is spurring growth in the nation of more than 160 million people. Spark is funding Nigerian entrepreneurs, who have unique ideas, but little resources. With 1 million U.S. Dollars to invest, spark co-founder Bastian Gotter says the company will help tech entrepreneurs get started in Nigeria’s tough business environment.
“spark was established because there was an opportunity, it was also established because we thought there was a lack of people exploiting that opportunity so there was a lot of young entrepreneurs who were trying but Nigeria is not an easy place to do business, it’s difficult to establish a company; talking to CAC (corporate affairs commission) Takes three months, opening a bank account, running a gen (generator), getting an internet connection, paying two years upfront on your rent like all that stuff, it’s not very easy.”
Spark was created by Bastin Gotter– web entrepreneur Jason Njoku, the founder of iRoko, a multi-million-dollar web distribution platform for Nollywood productions– and his wife, Nigerian actress, Mary Remmy-Njoku.
The company was established in February 2013, with an initial investment of 2.5 million U.S. Dollars, and so far, spark has been able to successfully fund 10 companies.
“Spark will put some money to work, we’ll find great young entrepreneurs and we will fund them with money to explore all the opportunity that the internet is giving us.”
Kuluya’s games are designed to appeal to a Nigerian audience with experiences that residents can relate to. It has over 100-thousand people playing games on the website each month.
Kuluya initially received 250-thousand dollars from iRoko’s njoku and then was integrated into spark when the investor began operations.
Olakunle ogunbamila, chief executive officer for Kuluya says being part of spark has helped the company put innovation in a business perspective that had been lacking before.
“we have become a bit more focused in terms of what we want to achieve, there is now a careful cause on revenue generation which is what spark has been able to help us align, you know, the important thing for them is to be able to generate funds from whatever business that is on the spark so as a ceo, we are told to focus on how to generate revenue as against just innovating for the sake of innovation and that has really helped us in streamlining our business plan.”
Another spark beneficiary is Hotels.Ng– a company that provides a platform for customers to make hotel bookings online.
Hotels.Ng works with over 4,000 hotels across Nigeria and they receive a commission for each booking made through its website.
“In the space of three months, we have gone basically from one employee to twenty, the number of bookings that we have done has tripled, our site traffic has more than tripled so basically, a lot has changed.”
Some financial analysts say Nigeria’s e-commerce industry is young, but growing rapidly, with millions of dollars already invested by venture capitalists.
Bolaji Okusaga, a business analyst and entrepreneur says companies like iRoko TV, online shopping platforms are setting a fast pace for e-commerce growth in Nigeria.
“I can tell you for a fact that if you see the level of competition at play even in the e-commerce sphere, what with Jumia, Konga and all of the people who are just coming on board right now, that industry… You know, will not be less than a billion dollars as we speak and then you can then begin to look at it, when you begin to look at it in terms of geometric growth in the next five, in the next 10, in the next 15 years, you may have an industry that will be one of the largest generators of employment and you know creating possibilities that will also enhance the nation’s GDP.”
Developers and investors in tech businesses face the difficult challenge to build solutions that can benefit not just Nigeria’s rich and middle class but also penetrate the day-to-day lives of people with less disposable income.
Spark’s founders plan to invest in at least 10 more companies and hope that within five years, the startups they have funded will be making enough profits to generate returns on their investment, so they can take on more entrepreneurs.