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investment opportunity in Nigeria

Thursday 18 September, 2008

I attended this presentation ohmsrazor by the principals of Ohm’s Razor ohmsrazorexecsum @ this  BNC Venture Capital Luncheon.  It’s an e-commerce & online payment play.  They seem to have had some success in pilots & beta testing with banks, no small feat, which speaks well for them.  I think it’s great that they are seeking funding in Chicago, but I just wonder how likely they are to get funded here.  It looks like the reason they’re looking here is the principals are natives of Nigeria who attended Kellogg, & there is more $ here than there.  I have no doubt there is an opportunity there because technology markets are still in their infancy in Africa, with broadband internet penetration dismally low.  It may be increasing with the acceleration of wireless broadband, but there will be other markets where that will grow before it will in Nigeria.  According to Internet World Stats, internet penetration is less than 5% in Nigeria, which makes any internet play questionable.  I question whether they’ll find investors comfortable with the level of risk they’d be taking on there, unless they find investors who know Nigeria very well themselves, & I don’t think there are many in the investment community who do.  Management & the advisory board look like they know Nigerian business well, but finding investors with the same level of knowledge will be difficult.   Their plans are ambitious, & they might even be able to implement them, but there are so many unknowns doing business there that I doubt investors who are known to be more conservative than on the coasts would buy into this.  It also appears as if they’re looking for more than start-up investors seek, $1-5M, so that indicates some niavete in knowledge of the process.  I don’t mean to sound negative-I just think it’s important to be realistic in setting expectations.  I don’t know if they attended the US-Africa Trade & Investment Forum but perhaps Mr. Dada could be of help to them in finding investors in Nigeria.

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