African mobile video network StarNews Mobile has secured $3 million in pre-Series A funding. StarNews offers African content creators a platform for monetizing their work through a subscription model. Currently, the service is available in six African countries, including Cameroon (where it started), Nigeria, Ghana, Congo, Benin and Ivory Coast.
Founder and CEO Guy Kamgaing launched the startup in 2017. His inspiration for this venture draws from his extensive 10-year experience in content monetization, particularly within the VAS (Value-Added Services) business. During this period, he actively participated in text/SMS-based campaigns and monetization endeavors, which provided the foundation for StarNews.
The five-year-old mobile video network prioritizes offering monetization avenues for African content creators through distribution partnerships with major telecommunications operators like MTN and Orange. Content creators often face challenges in generating revenue due to limitations on existing streaming platforms. As a result, StarNews connects them to mobile users who often lack access to relevant content due to expensive mobile data plans and a shortage of services tailored to local markets. A win-win for both parties.
“I realized that while I could monetize jokes and horoscopes via telcos for several years, no one was monetizing content on the traditional platforms, especially in Africa,” said the Los Angeles-based Cameroonian entrepreneur to TechCrunch. “There are thousands of creators online that don’t make money on YouTube or other platforms. So it was just putting two and two together, saying, ‘Well, this content is here that no one knows about and is very difficult to get the audience on YouTube and search, but I can help creators make money because I have a relationship with the telcos.’”
Mobile operators are pivotal in propelling content within Africa’s media industry, with unmatched distribution capabilities. Collaborating closely with these operators is imperative for establishing a solid presence in the market. Over the past few years, these operators have been instrumental in driving data usage across the continent, simultaneously upselling their customers with in-house content or partnering with entities like StarNews. To draw a parallel, Kamgaing stated that you can think of Orange as the “Apple” of Africa’s telecommunications world and MTN as the “Google.”
Connecting mobile subscribers to local content creators
StarNews boasts an active subscriber base of over 4 million through its partnerships with MTN and Orange across six markets (it exited South Africa after a misalignment with MTN’s strategy for engaging content creators) and a community featuring more than 120 content creators. This approach has enabled StarNews to organically expand its user base while securing nearly $8 million (including a $900,000 friends and family round, a $2 million seed investment and a $1.8 million extension) funding from an array of U.S., European and African VCs, including Investisseurs & Partenaires (I&P), Snap via its Yellow Accelerator program, LoftyInc Capital, Graph Ventures and Expert Dojo.
The platform is structured around channels, with each creator having a dedicated channel. Kamgaing says the company works closely with creators by providing financial support and assisting in content production; additionally, it guides the creators in their digital journey, offering support in digital acquisition. As previously highlighted, a significant portion of the company’s user acquisition comes through telecom operators, as it’s a seamless process for, say, MTN to send messages encouraging its customers to sign up to Star News to watch social media personalities, including music artists, comedians and influencers. For users, the sign-up process is streamlined for convenience, followed by a straightforward payment mechanism, allowing them to pay using their airtime; this works across six different networks, each offering users various bundles, weekly subscriptions and daily plans.
In addition to content produced by creators, StarNews features deeply hyperlocal content, spanning topics such as motorbike taxis in Cameroon or food recipes in Ivory Coast. The platform also hosts genre-specific shows, including the footballing competition African Cup of Nations and a program modeled after a singing reality competition, The Voice. StarNews leverages its partnerships with telecom operators to raise awareness and significantly boost user activations for these shows. For instance, in the 2021 edition of the African Cup of Nations (AFCON), the platform actively produced exclusive content straight from the event, resulting in the acquisition of 600,000 new users. Furthermore, the company sponsors concerts, and at one point, it attracted an impressive 500,000 subscribers by offering them the chance to attend a Fally Ipupa concert.
These initiatives highlight the power of strong partnerships, where telcos take the lead, followed by content creators or show organizers, Kamgaing, an ex-PwC consultant, remarked. According to him, this dynamic results in an influx of eager users to access the content or engage with the telco’s activities while positioning StarNews remarkably well to oversee content distribution, monetization, and creation effectively.
“Production without distribution is tough and tougher without monetization. There are a lot of people creating content, but they’ll put it on YouTube and Instagram, platforms that control the distribution. There’s no real monetization. We’re able to have all three layers at the local level. We have offices in all the markets and the teams there are specifically working with creators on content production, which is unique,” said the chief executive, while adding that the platform’s content spectrum has expanded to establish significant partnerships with the likes of Sony and Universal in the region.
Opportunity in Africa’s creator economy sector
Among its markets, StarNews has observed the most impressive retention rate in Nigeria, a market that exhibits all the right metrics for exponential growth, according to Kamgaing. Acquiring users is relatively straightforward, and the platform enjoys strong user engagement and stickiness; moreover, monetization is thriving, he said. StarNews employs an internal metric to gauge monetization, known as the billing rate. This metric represents the number of individuals who have sufficient available airtime to pay for digital services; notably, the billing rate is three times higher in Nigeria compared to the Francophone markets.
Kamgaing revealed that the platform distributed $1 million to content creators last year while maintaining an average monthly payout of around $70,000 to these creators. The fresh injection of capital serves as a significant uplift for Africa’s creator economy, an underserved sector in African tech (despite that startups like e-commerce-focused Selar are holding their own). This funding will equip the Los Angeles-based company, currently with 40 employees, to better support its creators and gradually enhance payouts in the coming years, a crucial step in bolstering the region’s creative industry.
Additionally, in a press statement, Kamgaing outlined the startup’s expansion plans, noting its intent to strengthen its dominant presence in Francophone Africa while quickly expanding across strategic markets like Nigeria and Ghana. StarNews is looking to be in 11 markets by next year, the chief executive remarked on the call.
Janngo Capital, an Africa-focused venture capital firm, led the pre-Series A funding round. Other notable investors, such as soccer players Aurélien Tchouaméni of Real Madrid, Jules Koundé of Barcelona and Mike Maignan from AC Milan, all affiliated with athlete representation agency Excellence Sport Nation, participated in the round. Kamgaing, in the interview, highlighted the shared African heritage of these players, underscoring their connection to StarNews’ mission and their genuine interest in engaging with the African audience and investing in startups across the continent. These French soccer players now join the ranks of investors like Blaise Matuidi, a former French international who has previously invested in Sudanese fintech company Bloom and currently heads Origins, a VC firm in collaboration with other soccer players who serve as limited partners.
Fatoumata Bâ, founder and executive chair of Janngo Capital, affirmed the firm’s support for StarNews, accentuating the platform’s unique positioning, strategic partnerships, technology and content. This support is rooted in the belief that StarNews is well-positioned to capitalize on the immense growth potential of Africa’s creative industry, which is poised for a fourfold expansion by 2050 and the possibility to generate up to $20 billion in GDP, she said.
“I am very excited and proud to back StarNews, the first media platform that supports African creators and tells the world the real African story,” added Fernand Tchouameni, spokesperson and investment advisor for Aurelien Tchouameni. “Being of Cameroonian descent, I can also see StarNews becoming a bridge to connect with the African diaspora, and I personally look forward to being on it.”