When I launched my first internet business, I asked a couple of friends to join me. The idea I had, to them was like a dream I would never awaken from. They silently refused. Only one was straight up with me and told me point blank that he would consider if I ever received a cheque from my online venture. Starting an internet business was unheard of at that time. No-one seemed to really understand what an internet company is but back then I believed it was time Zimbabweans had to consider investing in internet business. Fast forward to today, a lot has happened on the tech space locally and regionally with companies like Techzim and 263Chat becoming household names.
On Friday, 5 December 2014, the founder of one of Nigeria’s top internet companies Bella Naija was recognised at the NIGERIA ENTREPRENEUR AWARDS and honored with the Creativity and Leadership award. Take this healthy dose of motivation if your dream has been to raise an internet company in Zimbabwe. The Bella recognition is a great hint and motivator for all online companies in Zimbabwe and Africa. It shows that an internet company is not only a mere website on the internet but a real company which also contributes to the GDP of the country. The Bella Naija award also shows that Nigerians are learning to appreciate online companies. Why am I talking about Nigeria? This is supposed to be Zimbabwe Investment Opportunities. If you have an entrepreneurial eye, you will see that I have already talked about Zimbabwe.
In Zimbabwe, I could point you to a few top Internet companies that I believe are a success. I do not want this article to be mistaken for a top ten list of anything. I have just picked companies which I have been studying for a while and have made efforts to talk to the founders. What makes these companies special is what constitute their worth. To come up with a fair value for the three firms I analysed, I assumed that their real asset value is too small that it would make an insignificant difference to the firm value if it were varied thus the value of these firms exclude any tangible assets they may have. I would also advise you take the values I will talk about for heuristics mainly because I didn’t get financial statements of these firms to come up with the values.
I first met Fungai Tichawangana of Zimbojam at a pre-Christmas party arranged by a friend. Our hostess had praises for him. There is not a function that happens in Harare were someone from Zimbojam is not present. If they aren’t at the party you were invited, then you probably shouldn’t be there. We had a chat about investments, farming mining and finally blogging. He talked a bit about his internet company and I couldn’t avoiding going through the site after the party. Zimbojam has other divisions or backend products which are more of a diversity from what you see online but I had to be conservative in my valuation as I tried to separate all other activities which would otherwise thrive independent of their online site. I also did a desk valuation of Zimbojam and its worth should be around $US162,000.00
I have never talked to Sir Nige (founder of @263Chat) for more than five minutes on all of the four occasions that we have met. Mostly one of us would be in too much of a hurry to allow us to carry out a meaningful discourse. That did not stop me to do my own valuation of his internet company. Apart from Tinashe Nyaruwanga, if anyone else in Zimbabwe (myself included) tells you they are the best Twitter experts in Zimbabwe, you could be in danger of losing your money. Sir Nige is the twitter king in Zimbabwe. His firm has brought social issues to a whole new level and people from all walks of life can come and engage through his platform. He boasts of more than 64,000 twitter followers which on its own is worth more than most SMEs in this country. I have been conservative in valuing 263Chart as it has a different focus than the other two above. I believe if Nigel Mugamu is to sell his company today, he shouldn’t accept anything below the $180,000.00 mark.
I have used the above companies for heuristic purposes. I won’t be amused to see this article going viral on social media as another top listing of blog values without getting the lesson. I want you to compare these values with your non tech companies in Zimbabwe. I want you to value your companies and compare with the figures above. The answer should be simple. The above companies can be classified as SMEs but how many Zimbabwean SMEs formed about the same time with the above three have a value close to these three?
I do not doubt the contribution of agriculture and mining to Zimbabwe’s GDP but government should continue designing deliberate policies to support not only internet companies in Zimbabwe but the ICT space as a whole. If you have an idea to start and internet company, give me a call or send me an email.
To your continued success
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