Nigeria’s Hotels.ng Eyes Other African Markets After Raising $1.2M
Hotels.ng, Nigeria’s largest hotel booking website, said on Tuesday it had raised $1.2 million from two Africa-focused venture capital funds Omidyar Network and EchoVC Pan African Fund and was planning to enter other African markets, starting with Ghana.
Founded by Mark Essien in 2012, the website covers over 7,000 out of the estimates 10,000 hotels in Nigeria and has logged in over a million hotel search queries since it launched. It started posting a profit in late 2014.
Hotels.ng has 40 staff across Nigeria visiting hotels and striking deals with them, which has enable them to tailor the website to their needs and beat international brands such as Expedia and Bookings.com to local travelers.
“This additional capital will allow us to realize the next stage in our ambitious growth plans, which will see us consolidate our position as Nigeria’s market leader in online hotel bookings, with a view to expanding our service into other African markets, such as Ghana,” Essien said in a statement.
“Our mission was to ‘build local’ as a springboard for international expansion and this has resulted in really encouraging traffic and conversion figures so far,” he added.
This is the second time the company has raised funds. It received seed investment worth 225,000 from Lagos-based startup accelerator, Spark, that is co-owned by iROKO’s founder and serial entrepreneur Jason Njoku.
Nigeria’s hotels booking scene has warmed up to online booking in recent years, with Hotel.ng facing stiff competition from Jovago — funded by a German startup factory Rocket Internet — that has an inventory of 140,000 bookable hotels worldwide, including 200 in Nigeria.
Other local competitors include Wakanow and Nitestay.
It is estimated that Nigerians travelling within Nigeria spend at least $2 billion every year on hotel accommodation. Hotels.ng targets this growing market and currently process over 400 bookings daily.
Despite the growth of online hotel booking sites, many Nigerians still use time-consuming booking agencies or book a hotel face-to-face on arrival due to low internet penetration of just 16 percent and poor credit card uptake in a country of over 170 million people.
This however is likely to change over the next decade if internet access in Nigeria grows to 50 percent by 2025 as predicted.
“Hotels.ng hits all the marks of an investment with positive impact by leveraging online technology to connect buyers and sellers, supporting local small and medium businesses, and boosting consumers’ confidence in digital channels,” said Ory Okolloh, investments director at Omidyar Network.
Sign up for the Moguldom newsletter — business news you need to know about economic empowerment for the digital age, delivered to your inbox.