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Nigerian Startups Raised $178 Million from Investors in 2018

Nigerian startups continue to attract interest from investors, who are now staking more on them than at any other time in the short history of the country’s relatively young ecosystem. That’s what we can surmise from the Nigeria Startup Funding Report 2018, just recently put out by Techpoint Africa.

The report indicates that a total of 148 Nigerian ventures attracted $178 million in grants and from funding rounds over the twelve months covered. This confirms previous suggestions by analysts elsewhere that Nigerian startups maintain a significant share of the financial backing received by African tech-driven businesses.

Techpoint Africa, a digital media outlet dedicated to covering the emerging tech economy on the continent, says that it has produced the Nigerian Startup Funding Report to ensure that funding activity in the space is tracked and documented. It also presents the report as filling the need for stakeholders to access valuable data from the sector.

The document contains material from the three quarterly reports released by Techpoint in the previous year, plus trends and analysis of funding activity in the ecosystem. In those earlier reports, investors are shown to have backed a variety of ventures from various sectors, with financial technology startups taking up the lion’s share of the funds. Other sectors, such as e-health, agritech, and e-commerce were represented as well.

Prominent beneficiaries from the fintech arena include Cellulant, Mines, Paga, and Paystack, which drew in $47 million, $13 million, $10 million and $8 million respectively. Lidya, an online bank, received $6.9 million in funding, and PiggyVest (formerly Piggybank) which got $1.1 million. A number of others in the subspace lured support from venture capitalists in the time covered by the report.

Beyond the overall skew towards fintechs, there were impressive results from funding rounds undertaken by startups from a variety of backgrounds. Highlights here include internet service provider Tizeti, which announced last September that it had secured an investment worth $3 million. Others worth mentioning are Rensource, an energyfocused startup; Asoko Insights, a corporate information platform for Africa (which got $3.6 million); FarmCrowdy, an agritech startup ($325,000); and LifeBank, an e-health service (about $362,000).

The interest from investors in fintech arises from the fact that they seem to promise the most returns in the shortest possible time. Besides this, there’s a vast untapped market for financial technology in the country that’s almost certainly going to be reached over time. It offers investors an opportunity to reap rapidly expanding returns. As a result, they’re rushing to claim their share of an extended windfall of profits.

One important detail from the reports like the ones published by Techpoint over the past year is that the investment coming into Nigerian (and indeed African) startups is still heavily dominated by foreign venture capital firms. While local investment is slowly emerging, it remains a small fraction of the total lot.

Regardless of the geographical source of funding being recorded by ventures in these parts, it’s clear that there’s growing interest in Nigeria’s flowering tech scene, and that the world is watching its progress with keen interest.

The authors of the Techpoint report say they’ve omitted information about a $2 million grant given out by Google to Nigerian companies in 2018 in the Google Impact Challenge. That’s because the challenge was targeted specifically at non-profits, which aren’t covered by the report.

The full report also includes previously undisclosed funding rounds, as well as analysis of the numbers and description of the trends in the space as they’re perceived by experts.

You can access the Nigerian Startup Funding Report here.

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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