Exclusive: MIH Stopped MoMall Project, Invested In Konga Instead
We just heard MIH invested in Nigerian online retailer, Konga. Our source did not include financial details of this deal, but it’s significant enough for MIH to cancel its MoMall project in Nigeria.
The deal was sealed in October 2012 and will be officially announced in February this year. In December 2012, TechLoy hinted at the possibility of MIH investing in locally grown Konga or foreign-owned Jumia.
For Konga, this is funding to increase its product base or acquire smaller e-commerce companies like it did with 3Stitches. Konga can also leverage on MIH’s connections and experience across Africa and expand into other countries.
For MIH, it takes the pressure off building an e-commerce store from scratch (or using an e-commerce support service), figuring out the best delivery logistics and marketing the website.
MIH Internet Africa, the digital arm of media giant Naspers is known for launching websites like Mocality and OLX across Africa. Revenue from these websites is largely from advertisement and is based on pageviews and clicks.
Last month, we reported that MIH has plans to shutdown Mocality Nigeria and Mocality Kenya. We’re waiting for an official takedown of both websites as Mocality operations have been brought to a halt in both offices.
The pageviews from these websites are clearly not enough to sustain them at present, but we’re hoping MIH is looking at the future with OLX. With financial backing from their investors, they can go for the long haul.
Hopefully, the future doesn’t look like Kalahari and Mocality.
It’s worth noting that Konga and Jumia are backed by Kinnevik – a Swedish Venture Capital firm.
For players in the local e-commerce space, like JP Morgan’s investment in Jumia, MIH’s investment in Konga is validation that there is a market. We’ll be seriously watching this space in 2013.