Lagos-based Internet business builder SPARK, has raised a $2Mn investment from a syndicate of 17 international high net individual investors to build internet startups in Nigeria.
The investment round was based on a $10Mn valuation for the three month old company. Spark was started by Internet entrepreneurs Jason Njoku, Bastian Gotter and Mary Remmy-Njoku of Nollywood VOD start-up iROKOtv fame with an initial $1Mn fund to revolutionize Nigeria’s angel investment eco-system, focusing solely on the country’s Internet startup scene.
Njoku and Gotter will use the $2Mn to expand the company’s offices, initially in Lagos, before opening Spark hubs across Nigeria. The investment will also provide further follow-on rounds of seed-investments for Spark companies.
Spark companies currently employ 130 people across the nine launched companies, three of which have already secured second-round seed investments totaling an additional $700k from Njoku and Gotter, primarily to build upon their current market leading positions, compete more effectively and enable them to expand fast enough to meet consumer demand. Spark companies collectively generate $50,000 turnover a month and this figure is expected to increase significantly as the companies begin to really build traction. To-date, Spark has invested in some of Nigeria’s most exciting Internet startups including hotel room booking site, hotels.ng the undisputed leader in hotel room booking service in Nigeria; bus.com.ng; Nigeria’s number one bus ticketing website and ToLet.com.ng, who are revolutionising the customer facing lettings space in Nigeria.
According to Jason Njoku, Spark Managing partner: “We set out to grow the Spark companies to be market leaders. This requires capital. Our companies are laser focused, totally exceeding our initial expectations and showing increasingly strong metrics. Every Spark company focuses and generates revenue which we feel is essential to the survival of any Internet startup in Nigeria. Bastian and I were impressed with their output, as were our investors, hence we have been able to raise the sum of $2Mn in nine days from high network individuals, a mere three months after the official Spark launch. We expect to raise more money in the coming months to cement Spark as one of the preeminent Internet groups in Nigeria and Africa.”
Bastian Gotter, Spark Managing partner added: “Capital here in Nigeria is prohibitively expensive for most, so start-ups tend not to be able to grow at the rate that is required to become a mature and profitable business. Spark companies now have the capital behind them to invest in technology, good staff, building out their inventory – whatever is required to make them into a stronger long-term business. Jason and I have previously been vocal on the shortcomings of Nigeria’s business eco-system and how investment does not reach the right people. With this additional investment of $2Mn, we are now able to channel even more funds to the companies who will one day lead the continent’s Internet space.”
Following the launch of Spark in May 2013, a number of high net worth individuals from Lagos, Singapore and London approached Njoku and Gotter to discuss the potential of investing their private capital into Africa. Their direct approach and the fact that Spark opened and closed the round in nine days demonstrates how international investors’ interest in Nigeria’s Internet industry is growing, revealing the huge potential the continent holds in terms of building an exciting and profitable Internet marketplace. Currently, the Internet sector in Nigeria is valued at $250Mn, but industry experts have calculated that this will increase to $1Bn by 2016. Spark companies are positioned to take on and be front-runners in the race for Nigeria’s top Internet start-ups.