Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Agent of Impact Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe Log In

Tech investments target Nigeria’s unmet consumer needs

Nigeria’s entrepreneurs are having better luck raising capital, and 40% of the funding is coming from outside Nigeria.

In a record year for African venture capital investment, Nigerian startups raised $73,000 on average this year, up from $57,000 in 2015, the Financial Times reports. Underpinning the upswell: consumer needs, for one.

Nigeria is Africa’s most populous country, with 186 million people. But 50% of Nigeria’s adult population has no access to formal financial services; nearly 50% lack access to electricity; and while 81% of Nigerians have a cell phone, only 53% have internet access. Venture capital and foreign investors are paying attention to startups addressing those service gaps:

  • All On, backed by Shell, is working to galvanize foreign investment in Nigeria’s energy-focused startups (see above).
  • Tizeti, a company building solar-powered wifi towers in Lagos, raised $2.1 million this year; its backers include the founders of Silicon Valley’s Y Combinator.
  • Releaf, which connects agricultural buyers and sellers, was selected for Y Combinator, which comes with a $120,000 equity investment.
  • U.S.-based Accion Venture Lab invested in Lidya, a fintech startup that helps Nigeria’s small businesses build credit and access finance.

Also driving the investment surge: The Nigerian government is providing incentives for renewable energy development.

Three new undersea internet cables will land in West Africa this year and next, with a combined data transfer capacity of more than 100 terabits-per-second. And the cost of smartphones has fallen by nearly half in three years.

Bosun Tijani, CEO of Nigerian startup incubator Co-Creation Hub, says “serious money” is hitting Nigeria’s startup sector. “There is now a critical mass of people who believe they can build a sustainable and successful business,” Tijani told the Financial Times.

An early-stage funding gap persists for startups looking for debt and equity investments in the $100,000 to $1 million range.

You might also like...