by Oo Nwoye
Techcabal just broke the awesome news that Konga just raised 25 million dollars. That itself is a big story, but looking closer, what is the bigger gist.
Let us pay a little attention to the financiers. Here is a quote from the TechCabal story
Beyond the fact that the round is skewed towards Swedish Kinnevik’s lead, we could not ascertain the structure of the deal, nor the resulting valuation. Preceding cash injections saw $3.5 million seed (Kinnevik) and $10 million series A (Kinnevik, Naspers).
Kinnevik is basically the lead investor and has great control.
Let us move back a few weeks to the story of the MTN – Rocket Internet/AIH deal. The owners of Jumia and co via Africa Internet Holdings
The partnership will result in MTN, Millicom and Rocket Internet each holding a 33.3% stake in Africa Internet Holding (AIH).
So Millicom and Rocket Internet control AIH with 66.6% and in turn Jumia.
So why mention Kinnevik?
Well, Kinnevik practically owns Millicom and yes they are the largest investors in Rocket Internet.
Oh Shit! I hear you exclaim. Ah Shit indeed.
Kinnevik controls (technically you could argue) both Jumia and Konga and practically own ecommerce in Nigeria. That my friends is the bigger story.
Which brings me to a prediction for the next year I missed in my post yesterday. Konga and Jumia Nigeria will become one and will be run by Simdul Shagaya. With the co founders of Jumia rumored to have left, I do not think it is that far fetched.
PS. Let me introduce you to Cristina Stenbeck. The boss at Kinnevik. The most powerful person in the African Internet space. She is 36 years old. *bows*
by Oo Nwoye
When I read about the Rocket – MTN tie up, I thought “WOW!” for a second. Then was a little puzzled as to how a deal between the telco giant and an eCommerce juggernaut made any sense. I slept woke up and my eyes opened literally and figuratively.
I sent out a tweet to which Eghosa responded quite accurately
My main worry stems from Net Neutrality or more accurate the possibly death of it and the implications
Net neutrality (also network neutrality or Internet neutrality) is the principle that Internet service providers and governments should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, and modes of communication – via Wikipedia
Last year, Pando covered a company, ItsOn that makes it easy for web/mobile companies to pay for the cost of interacting with their application. I did not think it was a good thing then
Under this deal, Rocket Internet is financially aligned with two telecom firms MTN and Millicom (which also owns part of Rocket Internet and which is in turn funded by Kinnevik) that have access to over 200 million subscribers.
So how does his affect competition and consumer choice?
What if for MTN/Millicom subscribers to browse/shop on Jumia does not cost you any bandwidth/money and opening the Konga.com homepage wipes out 50MB? Where do you think people will go shopping? What about Movies/Media?
This no longer becomes a level playing ground. With this deal, “level don change”.
Of course, I will have to fearfully salute the Rocket guys and their obviously forward thinking backers for blowing up the ecosystem upping the stakes so drastically in less than 3 years on this continent. Can you blame them if they are within the law?
The way forward?
Those that are policy experts are better versed on how to allow the ’free market’ operate within the context of avoiding monopolies that harm the consumer.
Interestingly, net neutrality is at an important turn in the US and the result will change EVERYTHING