Original article by Alexander Onukwue for Quartz Africa
It starts as a scrappy blog of punchy hot takes by a hobbyist who gets tired of writing gadget reviews. Seven years later, it’s raising $2.3 million in seed financing from venture capitalists that believe it can be the most important publication covering the business and human impact of technology in Africa.
That’s one summary of the rise of Big Cabal Media, a Nigerian company that publishes the online outlet TechCabal, and Zikoko, a pop culture site that lights intergenerational Twitter fires with its blunt interviews and BuzzFeed-like quizzes. Tomiwa Aladekomo, the company’s CEO, says the funding round is “a signal that we are building something that matters,” describing his brands as experiments in understanding the future of media consumption in a youth-dominated Africa.
Experimentation has been key to Africa’s startup scene which received $5 billion from VCs in 2021. But media experimentation is a tricky business where household dollars prioritize food. What is the hack for sustainable influence for media startups?
“The most influential content goes beyond fundraising or launch announcements to showcase innovative or pioneering thinking”
True media influence goes beyond news
TechCabal isn’t alone in documenting African startups. In Nigeria, there’s Techpoint which hosted Twitter CEO Jack Dorsey in 2019, while iAfrikan covers the scene from South Africa. Weetracker, which charges subscriptions, is based in Kenya.
Each of these help draw serious attention to African startups, yet some observers still see an overt focus on fundraising news that leaves a knowledge gap in how the world understands African innovation. It’s leading to new competition from Substack newsletters, including one by Emeka Ajene, co-founder of ride-hailing app Gozem that operates in francophone west and central Africa.
“The most influential content goes beyond fundraising or launch announcements to showcase innovative or pioneering thinking that offers new insights to readers,” Ajene, whose newsletter is called Afridigest, tells Quartz.
David Adeleke, another Substacker who writes Communique on media and tech (and, like me, is a TechCabal alum), says “much of what tech media currently does is reactive.” As such, African tech publications are not doing enough of the agenda-setting that the media does in Silicon Valley. It’s partly a talent problem, Adeleke says: “not enough African tech journalists have spent a long time covering the continent’s issues enough to lead the zeitgeist.”
And real influence isn’t ultimately about quantifying clicks on articles or simply racking up subscriber numbers. Tefo Mohapi, founder of iAfrikan, says he measures impact by influencing decisions. “Some of our articles have been used in court cases given the information they presented, while some have been key in lobbying policy-makers.”
TechCabal can point to some ecosystem influence, leading the case for Nigeria’s Startup Bill in partnership with government representatives, investors, and entrepreneurs. Big Cabal has also been a talent mill of sorts for startups, numbering one Piggyvest co-founder, and the CEO of Pinterest-like app Backdrop amongst its alumni.
But Aladekomo hopes to do more with his now heavier wallet in areas like improving capacity for reporting. He’s hiring a former Rest of World and BuzzFeed journalist to be training and features editor, though declining to name her. Other initiatives to improve the newsroom’s capacity will flow from that.
“Ad revenue remains the most viable business model for African media. This means there’s very little room for the kind of ‘growth’ VCs desire.”
VC-funded African media is an uncertain territory
Venture capital funding for digital media companies has slowed, from a 2015 high of over $1 billion to just over $100 million in the US last year. But that’s still a lot; VC interest in African media has practically been negligible as investors focus on mining fintech unicorns.
Big Cabal’s raise, in which MaC Venture Capital, Luminate Group, Unicorn Group, and Future Africa participated, is on the back of the company quadrupling its revenue last year over 2020. Advertising on its websites and newsletters, sponsored events, and consulting projects are how it made most of its money.
Techpoint, which remains bootstrapped, was profitable last year, according to CEO Muyiwa Matuluko (an early TechCabal writer). They retained a remote work policy adopted in the pandemic, and switched its formerly weekly newsletter to a more personalized, daily digest supported by advertising. What does he make of the VC model?
“Due to socioeconomic constraints, ad revenue remains the most viable business model for African media. This means there’s very little room for the kind of ‘growth’ VCs desire,” Matuluko says.
Ajene shares a similar case for pessimism. “The current dependence of most Africa-focused media platforms on ad- and sponsorship-based models is generally at odds with traditional VC models, especially with the disparity in advertising average revenues per user across Africa versus more developed markets.”
While noting that producing quality content is expensive, Mohapi worries that VC money could affect editorial independence. “It is my personal opinion that in the long term it is not sustainable as it will taint the coverage that the media company does.”
“We want our content everywhere, for more people to read about the continent.”
Plan to be a media and tech company
Perhaps then, Africa’s future tech media platforms should be designed around subscription models like Weetracker which can offer high levels of recurring revenue when done right, Ajene suggests.
TechCabal isn’t going that route, yet. “We want our content everywhere, for more people to read about the continent. Paywalls reduce the number of people that can access the content,” Aladekomo says.
He is seeking value in tech-related products that can be monetized. Zikoko Memes, a project that may have been inspired by Giphy, will get a refresh this year to be more compatible with iPhones, Aladekomo says. An app is said to be in the works too.
It seems like getting VC investment could help strengthen a media company’s capacity for such endeavors. But most attention will be paid to how Big Cabal, Techpoint, and the continent’s other outlets extend their bandwidth to elevate tech coverage, paying talent well enough to hang around bars in Lagos and Nairobi to overhear employee and c-suite conversations that transcend unicorn funding stories.
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