African movies and music online distributor, Iroko Partners recently raised a $2 million round from Swedish venture capital group, Kinnevik, Reuters reports. The new round of funding will be used to take the company’s content distribution service to cable and satellite TV partners in the U.S. and Europe.
The Lagos, Nigeria-based company raised the funds from Sweden’s Kinnevik, an early investor in Groupon Inc. Iroko previously raised $8 million from U.S.-based hedge fund Tiger Global in April as investors in emerging markets seek to tap into one of the fastest growing movie businesses in the world.
The company’s revenues are predominantly generated through advertising around the movies. But in July it launched a monthly subscription with the promise of earlier windows for fans to catch new films without advertising.
Since launching two weeks ago the subscription service Iroko TV has signed up just under 5,000 paying subscribers according to Njoku. It already had 560,000 registered users since the Iroko TV service launched in January.
“The Internet is one of the most poorly monetized platforms for content,” said Iroko Partners’ Fonder, Jason Njoku. “Since we’re platform-agnostic it would be mad for us not to try and form relationships with TV.”
Kinnevik’s Investments head, Henrik Persson reportedly said his firm sees tremendous opportunity in the African media and online services space. “A part of our investment philosophy is that we think that the perceived risk is higher than the real risk in this market..what people see as a lack of opportunity is a lack of supply,” he said.