Despite challenges in the global economy and a slowdown in funding across Africa, Nigerian startups have demonstrated resilience by securing $160 million in funding during the first quarter of this year.
This shows Nigeria’s position as a key player in the continent’s vibrant startup ecosystem and highlights the potential for continued growth and innovation in the Nigerian tech sector.
A new report by Africa: the Big Deal noted that Nigeria, alongside Kenya, South Africa, and Egypt, accounted for 87 percent of all startup investments in Africa during this period.
The breakdown of funding among these four countries showed Nigeria leading the pack with $160 million, followed by Kenya with $108 million, South Africa with $72 million, and Egypt with $53 million.
This data underscores Nigeria’s dominance in attracting investment within the African startup landscape, cementing its status as a hub for innovation and entrepreneurship on the continent.
According to the report, the majority of investments were channeled to startups headquartered in these four countries, with Nigeria and Kenya capturing the lion’s share of funding.
Only a handful of other African nations managed to secure more than $5 million in funding during the first quarter, highlighting the concentrated nature of startup investment activity in Africa.
Despite the challenges posed by the COVID-19 pandemic and economic uncertainties, African startups have continued to demonstrate resilience and adaptability. Many entrepreneurs have innovated and created new business models to navigate the evolving landscape, driving growth and attracting investor interest.
Prashant Matta, SP of Panache Venture, acknowledged the decline in funding as a global issue exacerbated by economic challenges. However, he expressed optimism about Nigerian startups, citing mega-deals such as the $100 million investment into Nigerian mobility fintech startup Moove. These mega-deals, fueled by investments from outside Africa, show the confidence of international investors in the Nigerian tech ecosystem.
The report highlighted that the logistics and transport sector emerged as the top recipient of funding in the first quarter, totaling $151 million from 14 deals. Nigerian startup Moove raised a significant $110 million during this period.
Following closely behind, fintech attracted the second-highest funding with $105 million, followed by agric and food with $50 million, energy with $49 million, and healthcare with $45 million. These sectors reflect the diverse range of opportunities and innovations driving growth in the Nigerian startup ecosystem.