383 Nigerian tech startups raised over $2 billion in seven years – Report

About 383 Nigerian tech startups raised a combined $2 billion in funding between January 2015 and August 2022 more than any other country within that period across Africa, a report has said.

Disrupt Africa, a research platform that covers news on African tech startups, disclosed this in its recent report titled “The Nigerian Startup Ecosystem Report 2022”.

The report tracks the growth and development of Nigeria’s tech startup ecosystem from 2015 to August 2022 based on data extracted from a list of 481 Nigerian tech startups.

The report said Nigeria is one of Africa’s “big four” startup ecosystems alongside Egypt, Kenya, and South Africa.

“Between 2015 and 2022, 383 tech startups raised a combined $2,068,709,445 a higher total than any other country,” the report said.

It said as of August 2022, 107 Nigerian startups have raised funding accounting for around one-third of the continent’s funded startups so far this year.

The report noted that the country’s running total for 2022 stands at $747.9 million closing in on the annual record total from last year, put at $793.8 million.

Sub-national Performance

It said Nigeria was also home to the biggest round on record ever, earlier this year.

“Fintech Flutterwave netted a $250 million Series D round, reflecting both the enhancing maturity of the Nigerian ecosystem and its prowess in the fintech space,” it said.

“With at least 481 startups active across the country as of August 2022, Lagos leads the way with no fewer than 425 – 88.4 per cent of the startups tracked by the report based out of the city.

“Capital city Abuja comes a poor second with just 23 ventures, while activity is also in evidence in 13 other locations,” the report said.

According to the report, a total of 173 of the startups tracked (36 per cent) are fintech ventures, almost three times more than its nearest challenger.

“That is e-commerce and retail tech, which account for 12.1 per cent of Nigerian tech startups, with e-health and ed-tech coming in third and fourth respectively.

“There is, however, an extremely diverse range of activity across the ecosystem, with ventures active across areas as diverse as recruitment, mobility, logistics, agri-tech, entertainment, marketing, prop-tech, legal-tech, waste management and auto-tech,” it said.

The report said only 75 – 15.6 per cent of Nigerian tech startups have at least one woman within their founding team which means the country is more diverse in this regard than Egypt and South Africa.

However, the report said this figure is still far too low for a leading ecosystem such as this.

It said out of 481 startups tracked, 217 companies have taken part in either a local or an international accelerator or incubator, with this 45.1 per cent figure better than the 38.6 per cent witnessed in Egypt and far outstripping the 25.7 per cent rate seen in South Africa.

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“Nigerian startups employ a combined total of 19,334 people, dwarfing the 11,340 employed by their counterparts in South Africa.

“The average headcount per startup stands at 40. The fintech sector accounts for almost half of Nigerian startup employment, with 8,653 jobs, while between them the fintech, e-commerce, mobility and logistics, and e-health spaces account for 74.9 per cent of all jobs,” it said.

Reactions

Speaking on the report, Gabriella Mulligan, co-founder of Disrupt Africa, said: “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,” Ms Mulligan said.

“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,” Tom Jackson, Disrupt Africa, co-founder also said.