As expected the sudden announcement of Konga acquisition by Zinox Group is bound to generate debates, claims, counter-claims and revelations. However, some of the facts coming out are either interesting or worrying.
Top of the list is the unconfirmed news that Zinox Group paid a paltry $10 million to Kinnevik, Naspers and other minority shareholders to acquire Konga.com.
Neither Kinnevik AB nor Naspers has denied or confirmed this information and other details relating to the deal. However, should this be close the truth, it will mean both major shareholders must have lost a fortune of their money for venturing into the business.
Interestingly, the alleged $10 million value was actually close to the $13.8 million Kinnevik disclosed that as the net value of its investment in Konga when it did a write-down last year. Going by this argument, it would seem the value Konga was sold for was not that bad but the fact that Naspers’ stake in the company was not taken into consideration proves Konga sell-off might appear to be the biggest loss suffered by a venture capital in Nigeria till date.
To put a value on what must have been lost, Kinnevik said it has invested about $25 million in Konga to date. Naspers, owners of DSTV has also invested a near-equal amount in the business in the last five years.
The next few weeks will determine how much was collected to exchange Konga to a new owner. Kinnevik is a public company that will be disclosing its share of the sell-off.