Two weeks after global professional services firm PwC released a report in May which stated that Nigeria’s hospitality industry would be the fastest-growing market over the next five years, online hotel booking company hotels.ng got an investment of $1.2 million from international investors EchoVC Pan-Africa Fund and Omidyar Network. Having conquered the Nigerian market, helped by a 2013 seed investment of $225,000 from Spark, the Lagos startup accelerator fund founded by iROKO Partner’s Jason Njoku, hotels.ng is on its way to Ghana which has been identified as a hot market for hospitality expansion.
“We have started the process of expanding into Ghana and have begun the first steps on this expansion plan,” hotels.ng CEO Mark Essien told The Nerve.
The startup which is just in its third year has become the toast of several investors due to strong numbers and fast business growth. Mark says his company now gets investment offers on a constant basis but has been very careful to only work with the right people. “Omidyar Network was a logical partner for us, as their social mission is very aligned with our own and e-commerce is in their DNA.”
Only few other startups in Nigeria can boast of having achieved what hotels.ng achieved in less than three years in terms of growth and funding. One of the biggest challenges startups have complained about is funding. But Mark has enough funds to scale up his business in Nigeria and even expand to neighbouring Ghana.
For someone whose startup just got a 1.2 million dollar investment, others should listen when he explains why they aren’t getting.
“Getting funding for start-ups is made of several component parts. First of all, your startup has to be ready to receive funding. There are some criteria that people looking to invest in start-ups are looking for: you must be operating in a big market, showing traction and a few other things. Secondly, people need to be aware that your business exists and your story needs to be told.
“Many startups fail on one or the other of these things: Either their startup isn’t investment-worthy, that is everything about the startup isn’t right for investment or they aren’t telling their story in a way that gets people interested. I think that we have been lucky in this regard: first, we fulfill the startup criteria for raising money and we have put ourselves out there that we are able to get people to hear about us and for that reason funding has come,” the hotels.ng founder says.
While hotels.ng continues to grow with the Nigerian hospitality industry, forecasted to grow by a Compound Annual Growth Rate (CAGR) of 10.5 percent to 2019, it faces stiff competition from Jovago and Wakanow.com — both with more financial backing and presence in multiple markets — Mark is unruffled and seems to have a grand plan to compete favourably with his rivals. However, he declined comments on this.
Airbnb’s expansion drive in Africa has been described by many as a big threat to the hospitality industry. But Mark isn’t threatened. While he agrees that the California-based company offers a good alternative to hotels, the market as it is, is quite stable and is expected to remain so for the next half-decade.
But if there is a day the hospitality industry changes and hotel revenues drop because people found alternatives, hotels.ng will evolve with them.
“As Africa changes, so will the team – and the business – change,” says Mark.