Nigeria leads Africa for tech startup funding; fintech dominant

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Nigeria leads the way for tech startup funding on the African continent over the last eight years, with fintech companies the main driver.

That is according to the Nigerian Startup Ecosystem Report 2022, released by startup-focused news and research company Disrupt Africa.

Since launching its research arm in 2016, Disrupt Africa has built up a significant portfolio of publications, most notably the African Tech Startups Funding Report and Finnovating for Africa, available free for all via open-sourcing initiatives with various partners across the continent’s tech ecosystem.

The Nigerian Startup Ecosystem Report 2022, its 18th publication and third country-focused report, utilises Disrupt Africa’s datasets, expertise and networks to document what startups are doing what in the country, who is making investments, and who is providing ecosystem support. It also includes the full list of startups tracked for the purposes of the report.

It is released in partnership with Quona Capital, a venture firm focused on fintech that can expand access for underserved customers and small businesses in emerging markets; Sabi, Africa’s leading provider of commercial infrastructure for the distribution of goods and services; and MAX, which is building Africa’s largest mobility-tech platform. Other partners are Talking Drum Communications, Newtown Partners, Kwik, and LipaLater.

The publication takes as its starting point a list of 481 Nigerian tech startups for which enough data was available. Lagos is the leading hub for Nigerian tech, with 88.4 per cent of the startups tracked by this report based out of the city, while fintech is the leading sub-sector, with 173 (36%) of the startups active in this space.

Nigeria is the most popular investment destination on the continent, according to the publication. Between January 2015 and August 2022, 383 tech startups raised a combined US$2,068,709,445 – a higher total than any other country. Nigeria’s dominance is only getting greater in this regard. So far in 2022, 107 Nigerian startups have raised funding, accounting for around one third of the continent’s funded startups so far this year. The country’s running tally for 2022 stands at US$747,908,000 – closing in last year’s total of US$793,790,000.

Only 75 (15.6%) of Nigerian tech startups have at least one female founder, and just short of half have taken place in some form of accelerator or incubator programme. The 481 startups tracked here employ between them just short of 20,000 people.

“Nigeria has long been a pioneering startup ecosystem on the African continent, leading the way in various sectors and increasingly becoming a focus for investment. It is high time we dug deeper into its growth, and this report does just that. We hope it serves as a valuable resource for both those already active in Nigeria and those looking to start doing business there soon,” said Gabriella Mulligan, co-founder of Disrupt Africa.

“It is core to our identity as a company that we offer entrepreneurs – both active and aspiring – access to pivotal information, resources and opportunities with which to take their businesses to scale. The democratisation of data, and the release of detailed industry reports free of charge, is central to that, and with that in mind we hugely appreciate the assistance of all our partners, who are doing their bit to ensure this report reaches as many people as possible,” said Tom Jackson, co-founder of Disrupt Africa.

“As a venture capital firm firmly invested in the success of African startups, Quona is pleased to support Disrupt Africa’s endeavour to make this informative report freely available to the broader ecosystem,” said Kofoworola Agbaje, senior investment associate at Quona Capital in Lagos. “Nigeria’s fintech startup scene is responsible for some of the most interesting innovations on the continent, and we’re delighted to help shine a light on its progress.”

“What we are trying to do at Sabi, is be a platform that is enabling businesses across the value chain, get to the next level and be more efficient in what they do so that everybody has a better net benefit,” said Anu Adedoyin Adasolum, CEO of Sabi.

“At MAX, we believe that the key to unlocking Africa’s incredible potential is to help people and goods move from point A to point B. Unfortunately, systemic infrastructure and resource challenges mean it is unlikely that it will be governments or large corporations that will solve this challenge. Instead, we believe that the solution lies in empowering entrepreneurs – and that technology platforms like MAX will be vital for doing so. Like MAX, innovative businesses across Nigeria are creating new solutions to some of our continent’s most pressing challenges. It gives us great pleasure to partner with Disrupt Africa to share some of the remarkable progress being made, through the publication of the Nigerian Startup Ecosystem Report 2022,” said Adetayo Bamiduro, CEO and co-founder of MAX.

“We are excited to partner with Disrupt Africa to make this research about Nigeria’s growing startup ecosystem freely available to anyone that wants to explore and take advantage of the opportunities that are emerging. Disrupt Africa has been at the forefront of championing Africa’s emerging startup ecosystem for a while, and we are thrilled to be supporting the team to provide more analysis and insight to drive a progressive narrative about technology and innovation in Africa,” said Olugbeminiyi Idowu, managing director of Talking Drum Communications.

“Nigeria’s startup ecosystem has grown incredibly quickly over the past five years and holds exciting opportunities for the future. As an active investor in Nigeria, we are eager to see the advancement of the Nigerian tech ecosystem through knowledge-sharing and collaboration between local and international players. We are therefore delighted to support this initiative by Disrupt Africa to make this ecosystem report freely available to all stakeholders,” said Llew Claasen, managing partner of Newtown Partners. 

“In a very short time, Disrupt Africa has made itself an indispensable tool for startup founders in Africa. We are very happy to partner with them,” said Romain Poirot-Lellig, founder and CEO of Kwik.

“The African startup ecosystem has experienced remarkable growth with impressive achievements. Reliable and informative reports about the ecosystem raise the profile of our sector beyond Africa, and that interest helps to drive investments in productive startups. We are thrilled to partner with Disrupt Africa on the Nigerian Startup Ecosystem Report to drive data and insights on startup and investments in Nigeria, shining the light on Africa’s expanding ecosystem and enabling innovators to do more while indicating to the various ecosystem players better and more innovative ways of supporting local businesses to make strides,” said LipaLater Group CEO Eric Muli.

The Nigerian Startup Ecosystem Report 2022 is available to all for free, making the data and analysis contained in its pages accessible to those for whom the information is most valuable – entrepreneurs.

The publication, which is the 18th released by Disrupt Research, is over 50 pages in length and provides a detailed overview of the Nigerian startup ecosystem and its development over the last 5-10 years. It involves analysis as to what areas startups are active in, a detailed look at funding and M&A trends, and detail the range of startup support services available to Nigerian entrepreneurs, including hubs, incubators, accelerators, and government, corporate and university initiatives.

For further information, please contact Tom Jackson at [email protected]

About Disrupt Africa

Disrupt Africa is the one-stop-shop for all news, information and commentary pertaining to the continent’s tech startup – and investment – ecosystem. With journalists roaming the continent to find, meet, and interview the most innovative and disruptive tech startups, Disrupt Africa is a true showcase of Africa’s most promising businesses and business ideas. Its research arm releases in-depth reports on various aspects of the African tech startup ecosystem. Details here.

About Quona Capital

Quona Capital is a venture firm focused on fintech that can expand access for underserved customers and small businesses in emerging markets including Africa and the Middle East (MENA), Latin America, and South and Southeast Asia. Its Africa and MENA portfolio includes Yoco, Wasoko, Lulalend, Cowrywise, Khazna, Verto, Capiter and more. Quona’s global partners are experienced investors and operators in both emerging and developed markets, and invest in entrepreneurs whose companies have the potential to provide outstanding financial returns and promote breakthrough innovation in financial inclusion for both consumers and SMEs. Quona got its start through a strategic relationship with Accion, a global non-profit with a legacy in microfinance and fintech impact investing. More at quona.com.

About Sabi

Sabi is Africa’s leading provider of commercial infrastructure for the distribution of goods and services. Its platform enables and empowers the most underserved merchants in the world, allowing agents, merchants, aggregators, distributors, and manufacturers to expand their capabilities and grow their businesses using Sabi’s technology rails. These rails provide access to supply, logistics, business tools, data insights and financial services.

About MAX 

MAX is building Africa’s largest mobility-tech platform. Every day, millions of independent commercial drivers across Africa help move people and goods to where they need to be through the use of motorcycles (also known as okadas, boda-bodas or motos), three-wheelers (kekes or tuk-tuks) and cars. Founded in 2015, MAX provides these drivers with a subscription product that ensures they are able to work safely, affordably and in a way that minimises damage to the environment. 

About Talking Drum Communications

Talking Drum Communications is a public relations and communications consultancy that helps African technology companies and other stakeholders in Africa’s technology sector to shape perceptions and get more favourable and effective publicity for the work they are doing. We provide a unique combination of international public relations expertise and a clear understanding of the African landscape to deliver successful media campaigns that align with our clients’ business goals.

About Newtown Partners

Newtown Partners (newtownpartners.com) is the family office of successful startup entrepreneurs, Llew Claasen and Vinny Lingham. It invests across a range of alternative and traditional asset classes, especially early-stage venture capital to back startups utilising emerging technologies and disruptive business models. Since 2019, it has worked with pan-African and European logistics player, Imperial (a DP World company) to enable their corporate venture capital programme. Newtown Partners operates out of offices in San Diego, U.S. and Cape Town, South Africa. 

About Kwik

Kwik was founded in 2018 to provide groundbreaking online services to African merchants in the fields of delivery, fulfilment, and payment. More information on KwikStore can be found at www.kwik.africa.

About LipaLater

LipaLater is Africa’s leading Buy-Now-Pay-Later (BNPL) firm, with a strong platform, powered by a proprietary credit model, that enables retailers to sell their products to customers, on credit, at point of sale, with customers paying for their purchases in affordable, monthly instalments.

 

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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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