Raising Money is the Most Difficult Thing I ever did as Entrepreneur -Funke Opeke, CEO MainOne Nigeria
MainOne Cable appeared on Nigeria’s telecommunications scene in 2008 when it started its ambitious goal of constructing the first privately owned submarine cable for wholesale internet connectivity in West Africa.
The woman who led the vision is its CEO, Funke Opeke. Before establishing MainOne, she was MTN’s Chief Technical Officer. Prior to her career at MTN, she had worked for 20 years in the United States. She later served as interim Chief Operating Officer of government-owned telecommunication firm, NITEL, leading the parastatal’s privatization process.
At an entrepreneurial forum recently organized by Techpoint Media in Lagos, Opeke explained how it was difficult for her company to raise capital needed to start the submarine cable project. According to her, the sum of $300 million was needed, but she could only raise $240 million after encountering various difficulties.
“What I found out about raising capital in Nigeria is this: because of the informality of our society and the way it works, we actually have more informal than formal structures to raise capital and get started,” she says.
“That is unlike what we have in advanced markets, where you write a business plan [and] you go to the bank. In Nigeria, you write a business plan, you show some commitment and action, then you go to friends and families.
“Raising money is the most difficult thing I ever did as an entrepreneur. If you want your business to grow, you have to be smart and determined about raising capital.
“At MainOne, the first money we raised, $3.2 million came from family and friends. It was about 1.5 % of what we required. We needed $300 million but we were able to raise 240 million at last. It was the result that I was getting that allowed me to raise the capital.”
Understanding the Local Market
It takes only ignorance to deny that almost every facet of the Nigerian society is fraught with problems. For Opeke, the situation is an opportunity for entrepreneurs ready to solve these problems.
“What I see from entrepreneurs who are succeeding is, they continue executing and using their resourcefulness to demonstrate capacity. That capacity ultimately brings the capital they need to the business. People are investing because they think they can put money in your business and get that money back.”
She claims the reason why MainOne could scale was because it focused on delivering wholesale broadband connectivity rather than competing with the big telcos in the retail and home consumers market.
“A lot of people ask us, ‘why don’t you do retail or supply to home consumers?’ To do that, we have to make an investment of not 240 million dollars but 2.4 billion dollars. It is either we go to the space where we have four major telcos like MTN, Etisalat, Airtel and GLO or we go to where there is not much competition. You really have to pay attention to the market place, what your role is and where you can give value to get the impact that you need and the cash to keep your business running.
“What the average entrepreneur faces in Nigeria, to be successful, is daunting, but there are needs and opportunities to make a difference. I tell people that if I had stayed back in the United States, I would never have the opportunity to build a submarine cable that brings wholesale internet to all these people. Everything around gives you the opportunity to make a difference.”
Successful Entrepreneurs have their Challenges
Her advice for any entrepreneur who wants to succeed in Nigeria’s chaotic marketplace is to have good dose of passion, knowledge, and perseverance. “Let there be something that you will keep doing when everybody else has given up, or that something you keep refining and doing better than anyone else. But then if you give up, you won’t get the prize.
“Don’t think that successful entrepreneurs do not have challenges; be it the Richard Bransons and Bill Gates of this world. One of the things I do is to read biographies of great people like Steve Jobs leaving Apple. It is not that people who are successful in business have not experienced setbacks. It is just that they persisted in achieving the vision and delivering solution in meeting a need.”
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a graduate of Linguistics and a staff writer at Outrepreneurs, Deji's forte includes tech, startups and innovations. Years back, Deji wrote on Entertainment and Lifestyle for a tabloid. If he wasn't a writer, Deji would be a photographer or teacher.