Startups in Nigeria

Startups in Nigeria
From 2018 to 2022, Nigerian entrepreneurs registered an astronomical 1,288 startups. This is practically double the runner-up African country, Egypt, with 667 startups in those four years. While California created almost four times this number of startups, the state is also a hotbed of eager investors and worldwide attention. Nigeria still vastly outperformed all other African countries — in four years Senegal managed the second-highest $600 million in startup funding while Nigeria practically doubled with $1.09 billion in 2021 alone. Interestingly almost three-quarters of the funding went to fintechs. 

Flutterwave

Possibly the top fintech of 2023 is Flutterwave with an evaluation of $3 billion, the highest evaluation for any startup in Africa. This app is a way to send and receive money between individuals but also to receive pay as a registered business and create invoices. The company has an extension that online stores can use to accept money by card or bank account in 30+ currencies as well as an actual platform for the creation of their website — similar to Wix.com in the United States. For this wide range of financial services and commerce tools, Flutterwave has received increased attention and more than 1 million users since its seed round in 2018. 

NALA

One fintech called NALA has made it possible to work in the U.K. or EU and send the money back to a Nigerian bank. Estimates have indicated that 400,000 diasporans live in the United States and 200,000 live in the United Kingdom — so the ability to send money back home at low rates is welcomed. The startup wants to expand to all African countries, but Nigeria is the biggest achievement as it has both the largest population and the highest GDP in Africa. It is a user-friendly app that bank platforms are starting to integrate. It was ranked first at the EcoBank Fintech Challenge and has more than 50,000 downloads on Google Play as of 2023. 

Ranked in the top 10 fintechs of 2023, Risevest has transformed investing for Nigerians. It converts Nigerians’ money to dollars for a more stable and faster-growing investment. It allows users to invest in U.S. real estate and stocks for higher payoffs and greater access to promising startups. For the lazy investor, Risevest has employees creating startup or real estate portfolios. The company also offers U.S. bond options for a steady and safe return on investment. This link between U.S. growth and Nigerian investment has provided stability for Nigerians wanting to avoid inflation and save for college and retirement. 

Nigeria’s Startup Act

In October 2022, President Buhari created and signed the Nigeria Startup Act with the help of successful CEOs and digital leaders. This came after obvious startup success and a growing need to sustain all of Nigeria’s creative minds. In order to remove as many barriers to entry as possible the Act tried to remedy costly applications, slow patent creations and lack of funding for promising companies. This was likely influenced by the Tunisian Startup Act of 2018 which proved to be a major success. 

To inform and ease the startup creation, the government is creating a startup portal to freely register with the needed agencies, apply for a patent, use a crowdfunding intermediary, publicize to investors and list stock. The government has promised to fund ideas that will promote tech economic growth and lower exchange rates for international investors.

Now the CEO of a startup can receive a three-year freebie from income taxes and investors — angel, venture and private equity — can receive a 30% tax credit for their investment in a startup. 

Providing Grants

In April 2023, the National Council for Digital Innovation and Entrepreneurship originated to further support the startup revolution in Nigeria. The council was charged with providing grants to individuals pursuing postgraduate programs in the areas of science, technology and innovation. The team would create new digital technology parks and community enterprise hubs in Nigeria as needed to promote new minds in tech. It would also be in charge of choosing which companies deserved the most government investment. 

About CcHub

The third most important role in the Council — Minister for Communications and Digital Economy — went to successful entrepreneur Bosun Tijani, who in many ways began the startup revolution in Nigeria with his platform CcHub in 2010. CcHub provided design workshops, easy business registration, counseling, investor matching, a product development team and access to retail partners for Nigerian entrepreneurs. In this way, his platform led the startup revolution in Nigeria and began the work the Startup Act plans to continue. Through his platform, 1,100 startups were nurtured with $150 million of funding coming internationally. 

Even before being appointed as Minister, Bosun Tijani was bringing international attention to Nigeria’s tech boom. He brought Mark Zuckerberg to Nigeria in 2016 and Twitter CEO Jack Dorsey in 2019. As a part of the Council he met Bill Gates during a Youth Innovation Forum. He has done multiple interviews, presentations and outreach programs to motivate the youth to be entrepreneurs for their country. With international attention on the country and foundations in place for funding, the startup revolution in Nigeria is on track to continue the innovation boom it is experiencing. A promising future seems to await the economic leader of Africa — a country committed to unlocking its full potential.

– Claire Duvillier
Photo: Flickr