Nigeria has the talent and the hunger. What most of its creative businesses lack is a system for making money every month. That is the argument Marie Lora-Mungai, a former creative entrepreneur turned adviser to development finance institutions, makes in a column for TechCabal ahead of her masterclass at Moonshot in Lagos on 29 October.
She says about $3 billion has been committed to Africa's creative sector in the past three years by institutions including Afreximbank, the IFC, AFD Group and the AfDB, and much of it has not been deployed, partly because investors cannot find enough structured companies. Most creative firms she meets, even celebrated ones, earn under $100,000 a year. She calls them "Prestige Poor": rich in accolades, poor in cash.
The model: Mavin
Her clearest example is Mavin Records. Kupanda Capital spent two years rebuilding Mavin's team, processes, contracts and data before TPG invested $10 million. Universal Music Group later took a majority stake at an estimated $150 million to $200 million valuation, which she calls the largest deal in African music to date.
Three shifts to make
- Swap project-to-project income for predictable revenue: retainers for service work, repeat clients, a catalogue of licensable work, and equipment or studio space you can rent out.
- Spread the risk: sell to businesses and consumers, at home, in the region and abroad. Revenue in foreign currency is the best hedge when your own currency works against you.
- Learn to speak to capital: clean books, a cash flow forecast and clear unit economics, so an investor can read the business.
