In 2016, Nigerian-based enterprise marketing technology firm, Terragon acquired Alcatel Lucent’s mobile advertising assets across 16 francophone African countries. That acquisition didn’t meet Terragon’s expectations.
“16 markets in francophone Africa were going to give us 60 million profiles, while a prior deal with MTN Nigeria was going to give a similar amount.” Elo Umeh, Terragon’s CEO said during a TechCabal Live event on June 4th.
A shared vision makes all the difference
By the second time Terragon decided to make an acquisition, they had partnered with their target company for about 18 months. Terragon employees and management team members made several visits to the target company in India to ascertain that there was a cultural fit. Those trips and the 18-month partnership, were pivotal to the success of the Bizense acquisition. Bizense is a Singapore-based mobile marketing company with an office in India. Terragon acquired the company in 2018.
From these experiences, Umeh is convinced that the size of the opportunity is the first thing to consider when trying to close an acquisition deal. Figuring out the direction the market is headed towards can help companies make a good decision.
The importance of institutional backing in pulling off the acquisition was clear: it is one the factors that influences the outcome of an acquisition. Terragon had closed a Series A funding round just before securing the deal.
“Our series A raise played an important role in this acquisition, it triggered a market signal that we were capable of pulling this off,” Umeh said.
Keep Building, the returns will come
Umeh shared some advice about what it takes to run a successful business and raise a successful Series A round. He stated that entrepreneurs must refine their competitive advantage at every stage of their business, be informed about the size of the market, consider team evolution, scalability, create an exit strategy, and remember that people are key to the success of any technology company.
To deepen the tech industry across the continent, African businesses must continue using technology to disrupt existing spaces.
Watch the full conversation here.
