Tizeti, a Y Combinator-backed internet service provider operating in Nigeria, Togo, and Ivory Coast, has announced its intention to list on the Nigerian Exchange (NGX). This move comes two years after the company first expressed aspirations to go public. The Initial Public Offering (IPO) aims to raise funds from a broader pool of investors amid a challenging venture capital landscape, providing exit opportunities for its early investors.
Strategic Rationale for the IPO
Raising capital in naira allows Tizeti to sidestep the pressures typically associated with venture capital returns, particularly given the naira’s devaluation and a slowing economy.
Temitope Osunrinde, Vice President for Marketing at Tizeti Networks, noted, “We have started that journey but are focused now on the launch of our fiber broadband service. We will share more information on the IPO shortly,” although she did not provide a specific timeline for the listing.
Implications for the Nigerian Exchange
The IPO represents a significant opportunity for the NGX, which has struggled to attract Nigerian startups to list domestically. Many African startups have opted for foreign exchanges like the NYSE, often facing harsh realities in those markets. For instance, e-commerce giant Jumia’s shares have plummeted from around $14.50 at its IPO in 2019 to $4.64 today, and NASDAQ-listed Swvl Holdings experienced a similar decline.
Industry figures like Iyin Aboyeji advocate for startups to consider listing on the NGX, particularly after achieving an annual recurring revenue (ARR) of $1 million or more. He emphasized the importance of strategic fundraising, warning against raising Series A funding from investors who cannot support a global IPO scale.
Tizeti’s Business Model and Growth
Founded in 2013 by Kendall Ananyi and Ifeanyi Okonkwo, Tizeti aims to make internet access more affordable and accessible in West Africa. The company reported $1.2 million in revenue from 3,000 subscribers in 2018 and has raised $7.4 million in two funding rounds.
Tizeti differentiates itself by offering unlimited, uncapped internet at competitive prices, leveraging undersea cables from providers like MainOne and solar-powered towers. This model positions Tizeti as a superior alternative to satellite-based providers such as Starlink, known for their high costs and congestion issues.
Service Offerings
The company provides various products, including:
- Subscription-based unlimited internet access for homes and businesses in Nigeria and Ghana.
- Co-branded Wi-Fi hotspots with Facebook in high-traffic areas.
- Voice over IP (VoIP) services.
- The new FREEFIBER.AFRICA subscription service, which includes a US IP address, phone number, debit card, and mailing address for $10/month.
Tizeti’s network currently delivers over 180 terabytes (TB) of data daily, accumulating more than 35,219 TB by December 2023.
Conclusion
As Tizeti prepares for its IPO, the move could signal a shift in the perception of the Nigerian Exchange, potentially encouraging other startups to consider local listings. With its innovative business model and strategic growth plans, Tizeti aims to strengthen its position in the West African internet market while navigating the challenges of a fluctuating economy.
