It should interest you to know that this platform is just a way of spotlighting on people who make the major headlines in the media. These are the news-makers, whose daily lives rank high in everyday life. For this sake, our spotlight is on Bastian Gotter; co-founder, Iroko TV, owned by Jason Njoku.
Moreover, the new is that Gotter has bowed out of the co-leadership of Iroko TV to follow his passion – investing in and growing start-ups in Africa. That’s actually a piece of good news for Africa but a little worrisome for Iroko world. The reason for his decision, Mfonobong Nsehe, Contributor for Forbes Magazine, was able to exhume to clear the air.
Mfonobong Nsehe interview with Bastian Gotter
Talk to us about your tenure at Iroko – from a 2010 YouTube channel start-up to $33m VC-backed, pan-African entertainment and a tech powerhouse brand
Iroko was my first large personal investment – I always believed in young western educated people returning to their home country to build businesses. However that we would go on to change the nature of the Nigerian film industry was beyond my imagination at the time. Especially after we closed on the initial investment from Tiger Global, the business got very real, very quickly, and I decided to leave BP, leave London and head for Lagos.
Along the way I’ve acted in a Nollywood movie, I’ve picked up a few business bruises, as well as a Nigerian accent. But let’s be honest, Iroko was a huge step out of my comfort zone as a derivatives trader stuck behind 8 screens in London. Today I leave Iroko in the knowledge that the company has a strong vision and a solid management team to execute it. Iroko’s relentless focus on riding the macro trends of high quality local content and mobile in Africa, will drive it to become a massive consumer success and I’m proud to have been there from the start.
What’s been your greatest achievement during your time at Iroko?
I think the fact we’ve been able to consistently fundraise each and every year has been a significant achievement. It has allowed us to expand at an aggressive rate, taking on new markets, develop new revenue streams such as the film studio, Rok, as well as attracting top staff. This five year fundraising period came at a time when the Nigerian start-up world has been very much bruised by recession, yet we continuously convinced our investors to see the potential in Iroko.
Today, Iroko’s revenues allow it to only raise to grow faster, this is a luxury in the African start-up market and testament to what we have built.
You’re leaving the company you invested in, and have led, for five years – why now? What’s the significance of this timing?
Over the last five years, Iroko has grown from a one-bedroom pipe dream to a multi-million dollar global media brand. The company has seen so much change, and job roles have gone from being ‘all hands on deck’ to highly specialised. I morphed into the role of CFO but that was never my ambition, I was just good with numbers. So at the beginning of 2016, Jason and I started to look for a seasoned CFO to come and join the Iroko family.
In terms of timing, it feels like I do things in 5 year blocks. I traded oil for 5 years, then have been at Iroko for 5 years and think of my next move with a 5 year time horizon. With Iroko where it is today, and the fact that I’ve become more and more focussed on the start-ups I’ve invested in and worked with, it seemed like the right time to make the transition.
Through your numerous investments with Spark and beyond, you have an enviable track record of investing in successful Nigerian tech start-ups, such as Hotels.ng and ToLet.com.ng – tell us what are some of your latest investments?
Having seen and lived the start-up world for tech companies in Nigeria with Iroko, I have been able to meet with and subsequently invest in some genuine talent through a mix of personal investments and Spark. I’m part of the wider ecosystem and I genuinely believe reinvesting some of your gains is a founding block of a successful start-up ecosystem. In terms of cash on cash returns, my portfolio is up by 12x – and some companies, such as
What do you look for when you’re investing in an African start-up – what are the key indicators that suggest they have potential?
There is no clear and fast rule to investing, however I am pretty rigorous in following a couple of tick boxes. Is the founder good? Is the market big? Is the business model suitable to Africa? It is mostly on this last point that I see entrepreneurs and investors making many mistakes in Africa. Especially with international investors, there is a general lack of understanding of what 99% of the African consumer looks like and how to serve their needs profitably. The entrepreneurs who go on to scale the companies are, in my opinion, generally those who have an innate understanding of the African consumer, and can therefore tailor their product or service accordingly.
Iroko has given me an incredible insight into doing business in Africa and what I’ve learned is that there’s a real disconnect between international perception versus reality. What I mean by this is that international investors are often scared of investing in start-ups or founders on the continent, because they aren’t really sure of the market, the scale of opportunity or indeed where to actually invest. There’s a real lack of understanding of what this emerging market
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How would you describe the relationship between investor and start-up/co-founder – what does each party need to do to get the best out of a partnership?
The most tangible benefits an investor can bring to the table is long term cash, on terms that keep founders motivated. On the part of the founders, I think you have an obligation to communicate clearly and precisely your current strategy and the underlying KPI’s. I have found that founders generally tend to be worse at keeping their part, than investors keeping theirs.
What are you going to do next?
I am currently on a tour of Africa. I am spending three months in South Africa and subsequently plan to spend three months in Kenya. Along the way I will continue to invest, find new partners to invest with and continue to explore exciting business models for the continent.
Source: Mfonobong Nsehe, Contributor for Forbes Magazine