Zumi, a lifestyle and fashion magazine focused on the millennial generation has called it a day, and the founders are moving on to eCommerce for the same demographics, according to sources that spoke to TechMoran on condition of anonymity.
Zumi, which raised over $250,000 to expand into Nigeria and Ghana was founded by Ex-Rocket Internet executives William McCarren and Sabrina Dorman, and covered entertainment, lifestyle and relationships, fashion, beauty and style news for African women ages 18-35.
Zumi which competes Fabwoman, follows OMG Digital which closed in similar circumstances. Our sources claim Zumi, like OMG, grew on social media promotions and didn’t have a strong organic audience. With a team in Nigeria and Kenya, the firm’s run-rate was so high it couldn’t foot its operation minus raising more funding and therefore had to shut down. Zumi also could not have expanded to more markets in anticipation that ad revenues will sustain and grow the company, according to sources.
In Kenya, the firm let go of the whole content team of about 10 people in its bid to move into eCommerce as advertising and content syndication wasn’t making enough money to sustain the firm’s teams in Kenya and Nigeria.
With investor funds and revenues flowing in, the management of the firm is said to have let that get into its head and it grew too fast. Something they might have learned from Rocket Internet which is running in losses till today. For most entrepreneurs, problems might be repeated and its highly likely that if the founders launch an eCommerce site, chances are they will run into the same problems and close shop again.
“They were running too fast and scaling without a good revenue base. The firm went too big too quickly and launched allover with offices and staff. Zumi should probably not have depended on a model that needed staff in Nigeria and Kenya. It needed to be lean to survive,” our source told us.
Zumi’s total equity funding was about $370k after it raised $120 in August 2016 followed by the $250,000 to help it expand to the two new markets. Zumi had the best category of content to cover in Africa but it was not without competition in all these markets. Fashion, beauty, dating, work, health and self-improvement are key subjects to young women across the world and Africa is no exception.
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The content business is also so dynamic and its dependency on ad revenues is a hindrance to growth as Africa’s ad revenues are not that high.
