By Ifeanyi Abraham
#KongaMarriesYudala: The tale of how a Yoruba Princess marries an Igbo Prince amidst competition from a foreign prince who threw all his wealth at the Father of the Yoruba Princess but still failed
#KongaMarriesYudala: The story of how the Father of the Yoruba princess decided to take a much lesser bride price than marry off his daughter to a foreign prince
#KongaMarriesYudala: As I write this article, I am listening to Jay Z’s “Story of O.J”, the perfect soundtrack for this wedding.
A merger hasn’t been announced yet but as of today, the news is that Zinox Group, owners of Yudala.com have acquired Konga.com in a deal worth about 10- 15 million dollars.
With this tweet from the founder of Konga.com, Sim Shagaya which served to confirm the deal, a new era begun for ecommerce in Nigeria and indeed Africa.
For over a year in what was an important growth phase for Konga, I headed public relations and communications. Leaving when I left was hard as Konga was a great place to work but it was an important step for me as I got the opportunity to go to an industry I was very interested in; financial payments helping me complete the cycle- Online media, movies and music at iROKO, ecommerce at Konga and financial services/payments at eTranzact.
Not so long after, Konga having realised the importance of a complementary product started shopping for a mobile money licence and I remember when Sim walked into my CEO’s Valentine Obi’s office to discuss this. A few months later, Konga had acquired Zinternet and gotten its own mobile money license.
With many friends still at Konga, I kept in touch with everything that was happening, from Sim’s gradual release of power and decision making to the most recent decision to part ways with staff, a lot of which was misrepresented by the media as I can say a lot of staff walked away with good deals, some of them even jumping to the front of the queue as it would give them an opportunity to take time off from what had been a very committed effort to build a Nigerian company everyone was proud of.
As soon as I saw a tweet from Victor Asemota, a tech entrepreneur and influencer who two years ago had predicted Yudala’s potential, and the subsequent tweet from Sim, 6 questions came to my mind which also serve as basis for the development of this article:
- What would be the impact for ecommerce in Nigeria and indeed Africa? Is this the deal that would finally help Konga realise its dream of being the force of trade and commerce in Africa? Can Konga return to its marketplace drive that has helped build great entrepreneurs and delivered many from poverty?
- How much was this deal really worth? Was it more of a stock swap than an actual cash deal?
- Would the name Yudala be rested for a more powerful name- Konga; or would Yudala focus on its core electronics and Konga on its strengths- Comparative advantage play.
- Is Naspers (Former major investors in Konga and major investors in OLX, Careers24 and DSTV) finally deciding to water down its investments in Nigeria. I have also being hearing about a possible exit in OLX. I hope Lola Masha, Country Manager of OLX has the answers.
- How important was Konga pay in the deal? Zinox group now has a mobile money licence and with the right team could make a powerful play in this area as well.
- Is Jumia involved in this in some way and pulling the strings from the sidelines? This one I will not even analyse.
To answer some of questions I raised, I spoke to a couple of industry players and consumers; Victor Asemota, Wale Oshinowo an ex Konga staff and Olufunke Phillips, a digital influencer who helped me conduct a poll which has over 100 respondents so far:
Where did Konga go wrong?
Looking at the deal, if a year ago you had said it would happen, very few people would have agreed. In fact most people would have laughed you off. Yudala? How? From where to where?
Konga under Sim Shayaga’s leadership had a great vision and were executing it till what has been described as Investor impatience forced his hand.
Jumia which was its main competition had tried to acquire it at different stages but Sim Shagaya, a fierce believer in the importance of a Nigerian who understood the Nigerian market executing the ecommerce dream, pushed back for as long as he could.
Two years ago when he finally gave up the CEO position and daily running of Konga to Shola Adekoya the former CFO, many saw it as an exit from the company he had built, I saw it as the lesser of possible evils which included selling to Jumia. Shola Adekoya has done a commendable job of stirring the Konga ship and driving growth for the company.
Who gains most with this deal?
Apart from the obvious gainers Leo Stan and Zinox, Ecommerce in Nigeria and Africa gains most with this deal. With the right team, Leo Stan and Zinox group can now truly build the African version of Alibaba that could actually work.
Yudala already has a strong offline play and competence in offline retail, Konga has a bigger name, great online competence, an MOU with Nipost that really helps KOS Express do great things and Konga pay which if properly executed can truly help unlock the potential of ecommerce in Nigeria plus other things Zinox can use it for.
It is indeed a lesson about the importance of understanding one’s market. Leo Stan Ekeh and Zinox Group are showing their understanding of the market. Plus with the added ability to play in government, some policies that could help ecommerce in Nigeria thrive can now come before the top tiers of government.
And when the push for other markets come, not the PR hype of having multiple businesses across Africa, the Konga brand will help lead the charge.
Konga or Yudala, what name should be retained?
In the short run, both entities will probably be run separately but if we are to listen to the over 100 people that have voted in the poll, then it makes sense in the long run to merge and retain the Konga name. 93 of them believe in using the Konga name while 16 of them believe in maintaining the Yudala name.
It makes sense to use the Konga name in the long run as its a more recognized brand with deep ties with the market.
How important is Konga pay in this deal?
Let me provide context. A few weeks ago MTN announced their strategy for Africa in 2018. “To become the largest bank in Africa, leveraging scale, network, brand, infrastructure and distribution”. The strategy was announced by MTN CEO Rob Shuter at the Deloitte Africa in 2018 Outlook conference in Woodmead.
MTN has deployed Mobile Money across 14 markets and according to their 30-day active user metric, which is their most important matric, they are growing by half a million customers a month with a combined user base of 21 million subscribers.
With Konga Pay, Zinox gets a Mobile Money licence. With Yudala, Zinox already has an offline Agency network that mobile money can ride on and with ecommerce that is nationwide, Konga provides a vehicle/use case to tie everything together.
How soon will Zinox build out this “mini bank”, time will tell.
I have so many questions but don’t have all the answers. I am excited and see so many possibilities with this marriage including listing the new entity on the Nigeria Stock Exchange.
A few friends have asked me if I would like to be involved with the new entity. A quick answer is Yes. I believe it will be a very good opportunity to build something really remarkable that our children’s children will look back to.
To end this article I raise a glass of Moet and Chandon MCIII, a champagne that took 15 years to create and look to Madiba’s words
i. Vision without action is just a dream, action without vision just passes the time, but vision with action can change the world
ii. There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living
iii. Lead from the back — and let others believe they are in front.
iv. Overcoming poverty is not a task of charity, it is an act of justice.
v. Remember to celebrate milestones as you prepare for the road ahead.