It appears we’re witnessing a rapid growth stage in the ongoing evolution of Nigeria’s startup scene. We’ve reported about the fast rising e-commerce space, Lagos’s billion dollar tech ecosystem, and the impressive performance of fintech startups in the country. It’s all coming together nicely, even if in a laboured way – challenges persist, but the sector has withstood them, and is now making its mark on the global stage.
There’s probably no stronger indicator of this than the funding being scooped up by Nigerian startups. The figures have gotten better as time has gone on. In the first half of 2018, they’ve managed to attract over $82 million in grants and investments from within and beyond the country. Investors are staking more money on these tech ventures than ever, and the trends suggest that they’ll be putting even more funds into Nigeria’s startups in the coming months and years.
Research findings published by Techpoint reveals that fourteen local startups got funding worth a total of $9.4 million between January and March, 2018. In the three months that followed, funding levels shot up by an impressive 800%. Although this figure was somewhat skewed by a $47 million investment in a single company, the remainder still represents a big rise in funding for Nigerian startups.
The startups grabbing the big deals
Available data suggests that fintech startups are getting the most attention from investor groups. Of the startups that have received funding thus far this year, three operate in the financial services sector. One of these, Cellulant, took the lions’ share of funds, drawing in $47.5 million worth of series C funding from venture capital groups Rise Fund, Endeavor Catalyst and Satya Capital. Lidya, which offers tech enabled microfinancing services, got $6.9 million from Nigerian and foreign investors; and Piggybank, an online savings platform, secured $1.1 million in seed funding.
Other notable names on the list of funded startups include Asoko Insights, a market research and analytics company, which got $3.6 million in series A funding; O-Mobile Multimedia, a company delivering tech-enabled agricultural and financial services, was granted $10 million by Swiss NGO, the So.Sui.Ben Foundation; Trade Depot, a Software as a Service (SaaS) platform for trade, has also gotten $3 million in series A funding from Partech, a European venture capitalist firm.
There’s been a little controversy stirred by how reports on African tech ecosystems are classifying startups. While two-year-old Lifebank (which got $200,000 from EchoVC and CcHub) easily fits into anyone’s definition of a startup, Terragon Group, a data and marketing technology consultancy that’s over eight years old, also gets a mention in recent startup funding reports.
The investors betting on Nigerian tech
In actual fact, a fair fraction of startup funding has been grants, especially from competitions. This year, grants have been given by bodies and organizations ranging from the National Information Technology Development Agency (NITDA), to the Ford Foundation.
But hard nosed, return-seeking investors have committed to financing startups as well. The prominent international investors involved with Nigerian startups so far this year include EchoVC, Omidyar Network, and Seedstars. In the first quarter of 2018, 11 investors from outside of the country were announced to be in on funding local tech ventures; in the second quarter, this number increased to 21.
Nigerian corporations and investment groups have been involved with startups as well. Some of the players from the home front are venture capital firms Alitheia Capital, Leadpath Nigeria, and Ventures Platform.