Paystack’s CEO is building an African soccer club with a startup mentality

When a successful entrepreneur starts a professional soccer club from scratch in a country where sports is run as a distraction, will he build a charity case or another groundbreaking business? Shola Akinlade, CEO of Nigerian fintech company Paystack, is betting on achieving the latter.

On Feb. 13, his new venture, Sporting Lagos, played its first official match before familiar faces from Nigeria’s tech scene but also curious soccer fans. Played at an intense pace for 96 minutes, the match ended in an entertaining one all draw. Sporting equalized from an own-goal, one minute after conceding from a Go Round FC counter attack that silenced the vuvuzela-buzzing stadium.

At the end, the spectacle, which included an energetic half-time musical performance, was worth the price of admission that varied from 2,000 naira ($5) for one-time attendees, to N50,000 ($120) for people who want to be ‘founding members’ – one of Akinlade’s plans to position his club as being more than a millionaire tech CEO’s hobby.

Sports is currently a hot publicity wand for tech companies

The banners that encircled the field on Sunday were splashed with recognizable Nigerian tech brands, from the savings app Piggyvest (and Abeg, its newly acquired Cash-app-like startup) to Helium Health, a provider of digital solutions for managing hospitals. The game looked like a ‘startup soccer match’ in the same way the latest super bowl was dubbed ‘crypto bowl’ for the flood of advertisements from Coinbase, FTX, and other cryptocurrency companies.

These scenes in Lagos, and Los Angeles reflect a trend of tech companies betting on sports for visibility and credibility. England’s most successful soccer club just closed a training jersey sponsorship deal with Tezos (another crypto company) worth $27 million a year, while Spotify and FC Barcelona are reportedly finalizing a $320 million package that will see the historic Catalan club’s stadium renamed after the streaming app.

At the just concluded Africa Cup of Nations, TikTok, and Binance were among the official sponsors, and their investments may pay off; there were 1 billion views of TikTok videos produced by organizers and online fans of the tournament.

But sports business in most African countries is not often guided by a creative, entrepreneurial approach.

“Our current leagues are dominated by state owned clubs, so players are essentially civil servants,” says Wiebe Boer, the author of a book on the history of soccer in Nigeria and CEO of a Shell-funded investment company. “This is how the leagues in Nigeria were in the 1930’s and 1950’s but it is out of date in 2022.”

With state government-led setups that depend on how interested the incumbent governor is, Nigerian soccer clubs simply do not provide the kind of value or attract the sort of interest that European teams are known for. What happens is that players often protest unpaid salaries spanning months, something that also happens when Nigeria goes to the Olympics.

Designing the matchday as an experience

So what exactly can Sporting Lagos do differently?

“You make sure it’s not dependent on one person, and what Shola has done is put a group of professionals together,” Colin Udoh, a veteran sports journalist who is on the new club’s governing board, tells Quartz.

Besides leading Paystack, Akinlade is one of a growing number of African tech CEOs investing heavily in other African startups. But while he is the chief financier of Sporting Lagos, Akinlade does not intend to run it; he says his focus remains on Paystack. Udoh and a few other people have been tapped to set policy and execute on decisions that affect the club.

A number of people with means have reached out to say ‘wow, you guys did it and we’ll try to do it too.’

What they want is to design every matchday experience for Lagosians who would normally not go out for a soccer match to identify with a club in their city the way clubs in major European cities like Madrid, London, and Paris do, with guarantees of safety and a good time in a carnival atmosphere.

“That’s why we’ve started with the founding membership so that people feel like they own a part of the club from the get go,” says Fola Olatunji-David, a former head of Google’s accelerator program in Africa who is also a member of the club’s leadership.

Membership is one revenue stream. The club plans to develop an academy that will provide young players to the team, but also be a source of future revenue through player sales to Europe.

Umar Faruq AkinwunmiToday’s Sporting Lagos players might be tomorrow’s European stars

Another ‘Paystack’ to spur competition?

Taken together, optimism for Sporting Lagos is that it will be the sporting version of its founder’s now-Stripe-owned company, with a reputation for attention to user experience, and consequently high retention and recurring monetization.

But nothing is guaranteed. Soccer is not a frequent and intense need the same way payments is for online buyers and sellers. The club may well struggle to get popular attention beyond a tech ecosystem that can seem more active on Twitter than on the streets.

Also, the club is competing in the second-tier of Nigerian soccer which does not have the same following as clubs in the more established first division.

Umar Faruq AkinwunmiWill they pay to watch Sporting Lagos next time?

And so while Sporting’s leadership is bullish, they are also taking it a day at a time. Olatunji-David believes the club will find its core supporters by the end of the season. But the attendance on day one has him fired up, and already expecting competition. “A number of people with means have reached out to say ‘wow, you guys did it and we’ll try to do it too.’”

Just the way Paystack increased FOMO around investing in African startups, there just might be another rush, this time for early-stage soccer clubs.

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