Communiqué 69: The playbook behind MBO Capital’s bet on Nollywood’s global future
A behind-the-scenes look at how private equity firms like MBO Capital are taking Nigeria’s film industry seriously.
Keypoints
1. Creative ventures must be structured like real businesses. MBO Capital’s approach to film investment reveals a broader truth for all creative economy players: financial discipline, strong team structures, and clear roles are essential. Vague or inflated budgets, overly centralized control (e.g., one person writing, directing, and producing), and lack of professionalism are red flags to serious investors. Creative entrepreneurs must present their work with the same rigor and transparency as startups in any other industry.
2. Distribution is the new dealbreaker. For investors, content without a distribution strategy is a non-starter. Nollywood’s experience highlights that even great storytelling must be matched with clear paths to market, especially international ones. With the pullback of streamers like Amazon Prime and Netflix from Nigeria, studios that build relationships with global distributors or find alternative international routes (e.g., through regional aggregators) are now best positioned to attract capital.
3. Financial institutions are ready but selective. The emergence of structured funds like MBO Capital’s upcoming film fund and Volition Capital’s VEMA Fund II shows growing investor appetite for creative sector assets, but only when risk is mitigated. Revenue-participation models, proven track records, and tangible licensing deals reduce uncertainty. Creative entrepreneurs must learn to speak the language of investors—unit economics, risk management, ROI—if they want to unlock scalable capital.
1. Nollywood meets finance
In early April, a curious mix of Nigerian film industry stars and investment professionals gathered in a financial services firm's offices in Lagos for an important conversation: how to make films that make money. Hosted by MBO Capital, a Lagos-based private equity firm, the one-day conference brought together creatives and financiers to unpack the film business in Nigeria.
Unlike the typical glamour-heavy gatherings of Nigeria’s film elite, this event was equal parts business school and industry therapy session. Two standout panels set the tone for the rest of the conference. One, titled "Positioning Nollywood for Profit," brought together voices like BB Sasore of Nemsia Films, Enyi Omeruah of EK 782 Films, and Wangi Mba-Uzoukwu, former Head of African Originals at Amazon Prime, to dissect how to tell commercially viable stories. The second panel, "Looking Behind the Scenes: The Art of Telling the Best Stories," explored the creative process of filmmaking, with contributors like Arie Esiri (Eyimofe), Seyi Siwoku, cinematographer Ola Cardoso (Breath of Life, The Journey of an African Colony), and screenwriter Nicole Asinugo (Living in Bondage 2).
Over the last three years, MBO Capital has quietly built a track record as one of the most active financiers in Nigeria’s film industry. But this event wasn’t about showboating. Instead, it was about knowledge sharing. After several years of investing in Nollywood, the firm has learned what it takes to back a successful production and what red flags to watch out for. Now, it was ready to share these lessons publicly for the first time.
2. A serendipitous start
MBO Capital’s foray into film financing began in 2017, almost by accident. At the time, the firm’s investments focused primarily on sectors like real estate and manufacturing, industries with clear fundamentals and well-understood business models. But then an opportunity arose to invest in a slate of films by Inkblot Productions, a fast-rising film studio out of Lagos. Fresh off the success of The Wedding Party, then Nigeria's highest-grossing movie, the company was looking for working capital to fund its growing slate of productions. For MBO, this was a chance to test the waters.
So, it structured a deal with a revenue-participation agreement, and while the firm declines to share exact returns, it claims it was a financially rewarding partnership. The three films it funded—The Wedding Party 2, Moms at War, and New Money—are on the list of Nigeria's highest-grossing films. But the firm did not invest in more titles until the streaming boom of the early 2020s.
In August 2022, Amazon Prime Video officially launched in Nigeria, sparking a bidding war with incumbent platforms like Netflix and Showmax. Eager to secure high-quality local content, Prime Video signed first-look deals with leading Nigerian studios including Anthill Studios, Nemsia Films, and Inkblot Productions. However, these created a problem: the filmmakers had contracts to produce films with specific returns on completion of production, but no funds to make the films. This was where MBO Capital came in.
“To us, the presence of that streaming contract significantly de-risked the transaction because one of the things that you worry about if you invest in a film is, how much is this going to make? Is it going to [the] cinema? How much are you going to license it for? Is the streamer going to be interested?” Folajimi Alli-Balogun, MBO Capital’s assistant vice president and head of the film desk, told Communiqué. “But here we were being provided with the contract from the beginning that says I’ll license it for this amount. So there’s no risk in that sense. All you were facing was execution risk. And if Amazon is convinced by this producer's ability to execute this project, that was fine for us.”
In 2022, MBO Capital invested in producing Jade Osiberu’s Brotherhood and Gangs of Lagos. Brotherhood grossed 328 million naira at the box office, making it the second-highest-grossing Nigerian film of that year before its release on Amazon Prime Video, while Gangs of Lagos premiered exclusively on the platform. MBO Capital also invested in productions from other studios like Native Filmworks and Nemsia Studios. But the romance between Nollywood and streaming platforms was short-lived.
In February 2024, Amazon Prime laid off its African staff and halted funding for original content in the region. Netflix followed a similar route later in the year, significantly scaling down operations in Nigeria. As a result, MBO Capital’s strategy had to change. Instead of just investing in anyone with a streaming contract from Amazon Prime or Netflix, it now supports studios with a proven track record and a solid international distribution plan.
“What the best people are doing now is collaborating with international filmmakers. So maybe you make a Nigerian film with some South Africans that can pass for a Nigerian film, but you sell it to Netflix through a South African aggregator. And so by doing that, you remove yourself from whatever restrictions Netflix has placed on Nigeria,” Alli-Balogun told Communiqué.
Despite the reduced activity of international streamers in the Nigerian market, MBO Capital invested 2.3 billion naira last year and plans to double that number this year.
3. The MBO Capital strategy
After investing in over 17 Nollywood films, MBO Capital has refined its strategy for picking films and studios to invest in. The most important quality is an existing track record of delivering box office hits. For instance, Jade Osiberu had built a reputation with films like Isoken, Ayinla, and Sugar Rush before MBO Capital invested in Brotherhood and Gangs Of Lagos, and Nemsia had made films like Banana Island Ghost and God Calling before MBO Capital invested in Breath of Life.
A. Watch out for the budget: the devil is in the details
Also, from MBO Capital’s experience, the first red flag—or green light—is in the film budget. Some stakeholders say that the influx of cash into the film industry via streaming deals came with several acts of financial impropriety by some filmmakers, and was one of the reasons the major streamers scaled back investments. Now, MBO Capital demands financial discipline from the filmmakers it supports. “The level of detail in a budget tells you everything about the seriousness of the producer,” Alli-Balogun explains. He recounts seeing one budget so thorough it accounted for tissue paper and plastic cups used on set. That budget became a benchmark. “Now, when we get vague or half-baked budgets, we just send them that one and say, ‘This is the level of detail we expect.’”
B. Avoid controversy
Beyond the numbers, MBO Capital also vets for content that avoids controversy to steer clear of projects that might offend audience sensitivities. This lesson became more important after the Descendants of Isale Eko Union, the community where Jade Osiberu's Gangs of Lagos draws its inspiration from, dragged the producers of the film to court, demanding 10 billion naira in compensation for the wrongful depiction of the community as a den of criminals. The case was only resolved in March this year, with the Lagos High Court ordering Amazon Prime and the film producers to apologize to the community.
C. Hammer on the team structure
Team structure is another key consideration. MBO Capital avoids projects where one person wears too many hats: writing, directing, and producing. “That’s usually a red flag,” says Alli-Balogun. “We want productions that are run like proper businesses, with clearly defined roles, casting directors, line producers, directors of photography, people playing to their strengths.”
D. For distribution
Perhaps the most important factor these days is distribution. For a production to receive MBO Capital’s backing, it has to have a clear international distribution plan. The firm typically makes investments around the $500,000 range, through a combination of debt and equity. And Nigeria's domestic film market alone cannot yield the significant returns MBO Capital desires.
MBO Capital is not alone in seeing the Nigerian film industry as an investment-worthy asset class. More financial institutions are beginning to recognise Nollywood’s commercial potential and are structuring vehicles to back it.
Following the success of its VEMA Fund I, which financed Editi Effiong’s The Black Book, Volition Capital launched VEMA Fund II, aiming to raise $20 million to support film production and distribution across Africa. Similarly, investment firm Chapel Hill Denham announced a $1.2 million initiative last year to provide early-stage financing, business development support, and attract third-party capital to Nigeria’s entertainment and media sectors.
MBO Capital, for its part, is preparing to formalise its own role in the industry by launching a dedicated film fund. While details are still under wraps, the firm says the move will allow it to scale up its investments, bring in institutional partners, and take bigger bets on Nigerian cinema with global ambitions.
After years of being overlooked by the formal capital markets, Nollywood is finally getting the structured financial attention it has long needed. And as firms like MBO Capital continue to refine the playbook for film investment in Africa, the industry may be entering a new era—one defined by capital, not just creativity.