Nigeria’s mobile tech pioneer who founded MTECH, West Africa’s largest mobile content company, is producing the country’s next generation of elite entrepreneurs and internet companies – and he’s already got $5m for the job
In 1999, as the United States of America tried to find its way through the infamous dot come bubble, Chika Nwobi was an employee with phoneonline.com, a Knoxville-based mobile internet startup. The East Tennessee State University Computer Science and Economics Hons grad had always wanted to be an entrepreneur.
Sensing an opportunity around the corner, he spent a year gathering experience on mobile web technology, at the time a disruptive phenomenon at the time enjoying gradual uptake in the USA.
Chika recalls, reclining on his black leather office seat: “It was a great time.”
The homecoming
With no veteran experts to consult on this amazingly novel technology, Fortune 500 company execs turned to 21-year-old Chika and the likes who had the head start. “The Vice President of AT&T would call me!” Nwobi exclaims with a smile.
Meanwhile, his home country Nigeria was witnessing a shift to democratic governance after 13 years of military rule, and with the shift renewed hopes of political stability and economic wealth for the famed giant of Africa.
On one of the endless foreign tours of then-president Olusegun Obasanjo’s several foreign tour, Nwobi got wind of the news that telecoms companies would be rolling out soon. He decided to return home, encouraged by dreams of making a million bucks within six months of providing mobile internet service to a hungry market.
It hadn’t yet become fashionable to return home to Nigeria. But family friend Ndidi Nwuneli inspired him. The Harvard Alum, who later blazed a trail in non-profits in made the strange decision to return to Nigeria, motivating Nwobi to also go against the grain and make, early a move many of Nigeria’s now leading tech entrepreneurs eventually had to imitate.
With $300,000 in seed capital from Lateef Belo-Osagie, media entrepreneur Chris Ubosi and others, Chika sourced 10 fresh Obafemi Awolowo University grads and founded MTech Communications.
However – and this is contrary to popular belief – MTech wasn’t an instant success. It would take nearly 3 years before the company made any substantial earnings.
Sure the group of self-taught 20-year old mobile engineers set up the first access and content servers, wap gateway, and the whole gamut of mobile internet infrastructure supporting first mover MTN without any external input. Unfortunately, inadequate network capacity and expensive data costs discouraged subscription. By the end of the first year, the young founder had run out of cash.
By the second year, the startup had become to miss salaries Fortunately, however, the investors were amazed by what the committed lot had achieved and decided to cushion with a little more funds.
“The product, commercially, was a huge failure,” Nwobi recalls. “But from a credibility standpoint was successful. Our financial backers and the MTN guys believed we could do anything.”
The credibility worked wonders. Soon, Nwobi and his team began to get several opportunities from MTN to develop other products – polyphonic ringtones, caller tunes, and a plethora of value added mobile services. MTECH became a massive success!
In 2007, the company generated N600m in revenues with a net profit of N116m. MTECH soon expanded services to all Nigerian networks, began providing audience interactivity solutions for hit TV and radio shows and infiltrated new African markets.
The premier mobile content company now leads markets in Ghana, Kenya, Uganda and Cote D’Ivoire and waxes a $28 million market capitalisation on the Nigerian bourse alone. Owning, by the age of 30, a majority individual shareholding in a multimillion-dollar company, Chika Nwobi was living the ‘Silicon valley dream’ many local tech entrepreneurs still only fantasise about.
“Chika is the god of this whole thing (Nigerian mobile and internet business),” iROKO founder Jason Njoku once said.
True Blood
Born to entrepreneurial parents 36 years ago, Chika grew up in Nigeria. He attended the prestigious Corona Primary School, Model College Badore and Atlantic Hall. His father founded one of the earliest Nigerian courier companies – Choice Courier (now Tranex Plc). His mother also went into business after a successful career as a civil servant.
Light-skinned and chubby, Nwobi fittingly stretches 6 feet high and exudes a charming warmth. What strikes you though is the evenness of his persona – no skewing left or right, excited or dampened. The word is – steady.
His tenor voice has neither the telling accent of his Igbo nationality or the acquired tongue of years in school or work in America. In spite of more than ten years as a chief executive controlling major sums, his dress code is still casual. Chika’s signature is a pair of black-rimmed glasses, short sleeves or polos.
Not surprisingly, even this is neither law nor dogma. At MTECH’s listing on the Nigerian bourse in 1999, Chika joined his high-powered board of directors dressed in a fitted grey 2-piece suit.
The Developer
Bespectacled and covered in a purple Ralph Lauren polo, carton-brown chinos, pink happy socks and a pair of laceless black shoes, Nwobi seats behind a clustered black executive desk at his Lekki-based Level5 Lab – a startup accelerator company he founded in 1999 after dropping active roles at MTECH. He wanted to focus on his passion for building talents and products.
“My role as Group CEO was distracting me from my passion and at that age (28) I needed to do what I enjoyed,” he shares.
But he left a solid legacy from those years as CEO. Many of his pioneer hands are leaders across tech verticals and companies. The leaders of Nigeria’s top three mobile content companies, Twinepine and Terragon Group CEO Elo Umeh, MCOMM founder Mr Chidi Aneto-Okeke and Interswitch Group Marketing Lead Enyioma Anaba are a few of the 10 success-hungry geeks that Chika hired as MTECH’s pioneering workforce. According to Chika, “one of them also now runs network infrastructure for AT&T in America.”
Under L5Lab, which also is a member of the $100m One Africa Media Group, he founded Kamdora.com, a defunct online fashion retailer he now considers unsuccessful. Along came Cheki.com.ng, which he co-founded with OAM boss Carey Eaton, and has helped grow into Nigeria’s largest online auto marketplace with over 40,000 listings.
The most notable success, however, has been his support and reported N10 million cash-for-equity investment in a cash-strapped employability portal called Jobberman.com.
That Jobberman interest exponentially appreciated following an unexpected million dollar funding from Tiger Global in the startup. Under Nwobi’s institutional guidance, the L5Lab portfolio companies, seeded with “tens of thousands of dollars”, have developed into market leaders along their different verticals and according to the serial founder, are currently worth a combined $5 million in OAM shares.
In February of this year he took a step further. Venture capitalists L5Lab and Kenya-based 88mph launched 440NG – a Lagos-based $1.5 million early stage funding and accelerator program modeled after Y-combinator. The joint venture will be providing a potpourri of support and seed funds of $20,000 to $110,000 to 10 selected startups, which will be working out of its posh Moore House penthouse overlooking the highbrow Ikoyi area.
The steady Nwobi can barely contain his excitement about this one: “440 is going to be a world class startup environment and the best Nigeria has ever seen!”
It’s planned to be a scalable and systematic approach to churning out both great talent and African products which will benefit from a web of internationally experienced mentors, pool of powerful investors, partners such as Google for Entrepreneurs, and a network of important clients.
“Having seen the talent, hustler mentality, and sheer market size of Nigeria, I think we will see some amazing companies come out of this program,” 88mph founder Kresten Buch, adds.
Foreign money and local players
Nigeria’s tech startup ecosystem received a major boost in 2011/12 when US-based fund Tiger Global made multimillion-dollar investments in three of the country’s leading startups. Nollywood digital distributor iROKO TV clinched a widely celebrated $8 million commitment, travel online agent Wakanow received an undisclosed multimillion dollar funding while Jobberman got a million dollars. Nigeria had officially arrived.
“Tiger and Kinnevik invested here when nobody was willing to take such risk and the entrepreneurs couldn’t afford to mess it up for future entrepreneurs,” Nwobi reflects. “This was a great opportunity for the Nigerian story.”
He thinks it has been a huge success so far. “Our first set of entrepreneurs are doing a great job, executing well and securing additional funds,” he says. “None of the publicised invested companies has shutdown years after. Even some investors have already made money. I have made really good return divesting a third of (my) equity in Jobberman and this development is much needed for progress. I believe that more investors are now looking at the Nigerian space and there should be an exponential jump in startup activity.”
Since Tiger Global’s early investments, the American tech fund has made additional commitments in Nigeria while Kinnevik, Naspers, Rocket Internet, Microsoft, Intel Capital; Millicom et al have also joined the party. According to CrunchBase, last year was by far the most active period for Nigerian technology investment.
No walk in the park
Husband and father to a set of male twins, Chika Nwobi, as successful as he is, is not without his own regrets. Standing in the back end of his white-walled workspace and staring dramatically into the space in front of him, he confesses, having achieved more success than anyone around him at the time, to have sunk into complacency, too early, while running MTECH.
“If I had stayed hungry I could have made MTECH much bigger. But I was young, bored and had that kind of serious cash flow,” he laments.
Then he recalls with a grin how he turned down MTN’s near $1m acquisition offer for his mobile web product. Fresh from America, he had imagined his magical mobile Internet service would make a million dollars within six months!
“For almost 3 years, I and my stomach regretted not selling to MTN,” he bursts out laughing.
Still, his regrets are clearly only a matter of form and scale, certainly not of substance. To all intent and purpose, he is a man who has done well for himself. For this, he credits the phenomenal power of ‘disruption.’
‘It gives opportunities for nobodies to be somebodies,” he says. “Graduates who would never have had a chance in Shell Petroleum for the next 20 years now own massive things. Jobberman and Cheki founders were nobody four years ago.”
And what does the god of big things see in the future? “We’re still in the middle of that disruption,” he declares, with certainty.
There are many young and coming entrepreneurs across the country who will say yes and amen.
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