Internet marketing firm eyes rivals with cash pile

Money Markets

One Africa Media staff play during lunch break in May. Australian recruitment portal Seek bought a 25pc stake in the firm for Sh1.8 billion. PHOTO | PHOEBE OKALL  

By GEOFFREY IRUNGU

In Summary

• Seek bought a 25 per cent stake in OAM for $20 million, in a deal that valued OAM at Sh7 billion ($80 million).
• OAM has operations in several African countries including South Africa and Nigeria.
• Among firms competing with OAM in Kenya’s online classified advertising market are OLX and Jobskenya.

Internet marketing firm One Africa Media (OAM), which recently bought nearly a quarter of local property portal buyandrentKenya.com, is eyeing more acquisitions in local online advertising.

 

READ: South African firm buys stake in Kenyan property website

This comes after OAM got capital injection of Sh1.8 billion ($20 million) from Australia-based recruitment portal Seek — which is also on an expansion drive across the continent.

Seek bought a 25 per cent stake in OAM for $20 million, in a deal that valued OAM at Sh7 billion ($80 million).

OAM chief executive Justin Clarke said in an interview that the company’s acquisitions are intended to grow the business which he co-founded with Carey Eaton, who was killed recently in an attack by suspected robbers.

“We are looking at several ways to grow the business, including more listings of classifieds and acquisitions. We are going with these plans even after the death of Mr Eaton, one of the company’s founders,” said Mr Clarke.

The Kenya-based online firm began operations in South Africa. OAM has operations in several African countries including South Africa and Nigeria.

Besides real estate sales, the company runs classified advertising websites including BrighterMonday for jobs, Cheki for cars and Staynow for travel. Mr Clarke did not disclose acquisitions the company was eyeing, saying that talks were still at an early stage.

Among firms competing with OAM in Kenya’s online classified advertising market are OLX and Jobskenya. There are numerous firms in Internet classified advertising in South Africa and Nigeria, some offering the service for free.

The firm is setting up business in Tanzania and Uganda, though it has been sourcing classified ads from these countries from the Kenyan base. OAM is based in Nairobi’s Westlands area and employs a total of 600 people.

“We started the Kenya office in 2010 with only four people, but in the past four years this has grown to 130 and we expect it to grow further in coming years,” said Mr Clarke.

Risks of fraud

He said that risks of fraud were increasing with growth in online advertising. “You only advertise on our sites when we have physically checked out the properties or cars you want to sell and certified them as genuine to avoid frauds,” said Mr Clarke.

Internet advertising is on the rise in Africa. According to online data portal Statista, online advertising for both Africa and the Middle East stood at Sh109 billion ($1.24 billion) in 2013 and is set to grow by 38 per cent to Sh150 billion ($1.71 billion) this year and again by 30 per cent to Sh195 billion ($2.22 billion) next year.

The statistics however are not broken down by country.