- Nigerian Startups Attract $110m Investment in First Half
Economic uncertainty and weak investment sentiment were not enough to deter investors from investing $110.9 million in 44 startups in Nigeria in the first half of the year.
A data compiled by Techpoint Africa showed Nigerian start-ups raised the funds in more than 50 rounds denominated in naira and dollar.
Crop2cash, an Agric-tech company raised $100,000 pre-seed round while another startup, Provider, an AI-powered food delivery firm, received $1000 pre-seed funds from Rowland Eno, an Angel investor, in January.
In February, only one startup raised fund. TeamApt, a Nigerian fintech start-up, received $5.5 million Series A fund from a number of investors led by Quantum Capital Partners, a Nigerian venture capital company.
CredPal from Y Combinator and Kudi, a digital payment start-up raised $150,000 and $5 million in March, respectively. Paylater owned by OneFi received $5 million debt facility from Lendable and MiddleTrust, an escrow service provider, also raised $5,000 pre-seed investment in March.
Jumia raised $56 million corporate round investment from MasterCard shortly before it went public in April, while Gokada raised $5.3 million in a Series A funding round. Several other startups received funds in the first half of the year.
Experts however advised that while the funds were good for the country and economy at large, it could disrupt the ownership structure of the businesses.
“Although, some people believe that these funds are Foreign Direct Investment and beneficial to the country, but that would have been a sound argument except for the fact that if you allow too much foreign interest into your economy, then you own nothing at the end of the day,” said Yele Okeremi, the President, Institute of Software Providers of Nigeria.
He explained that “FDI is good and should be encouraged but if we know what we are doing, it should be a fraction of the local investment. Start-ups are better off having the bulk of their capital from local investors than when it is from foreign investors.”
Tomi Davies, the President of the African Angel Business Network, said funding is still a challenge for seed stage startups as investors are focusing more on growth stage start-ups.
“While we are awash with funding for the growth of start-ups that have found product-market fit, there is still a shortage of funding for seed stage start-ups in incubation that are still trying to develop their minimum viable product. As they require smaller ticket size investments in addition to more mentoring and advisory, they are still lacking adequate attention in the commercial world,” he said.
In recent years, Nigerian tech startups have become one of the preferred investment destinations for investors, largely due to the huge internet penetration, 119.5 million internet subscribers, and rising number of financial technology companies amid a growing smartphone population.
The rush to seize a reasonable chunk of the Nigerian tech space is compelling investors, both locally and foreign, to take a risk on Nigeria given her huge potential and opportunities.
Pantami Moves to Tackle $2.16bn Capital Flight from Telecoms Sector
$2.16bn Leaves Telecommunications Sector Yearly
The Minister of Communications and Digital Economy, Isa Pantami, has put the total capital flight from the telecommunications sector at $2.16 billion per year.
A large part of the total amount comes from those renewing and purchasing software licenses, domain subscriptions and renewals, and cybersecurity.
The minister said to stem the trend, the ministry has developed a policy to promote local content in the sector.
In his speech at the digital day celebration, Pantami said the Indigenous Content Development and Adoption, under Pillar #8 of the National Digital Economy Policy and Strategy (2020 – 2030), would tackle the issue.
Pantami said, “As part of our efforts to promote indigenous content, we have developed a policy for promoting indigenous content in the telecom sector to complement similar efforts that focus on the information technology sector.
“This is important to stem the tide of capital flight, among other things. A report of the Association of Telecommunication Companies of Nigeria suggests that such capital flight in the telecom sector is as high as $2.16bn annually.
“A healthy digital economy requires a robust indigenous content policy to significantly reduce this.”
Pantami stated that there was an urgent need to promote and support the development of indigenous content in all sectors.
He explained that the Indigenous Content Development and Adoption pillar was addressing this for the digital economy.
“This pillar aligns with Executive Orders 003 of May 2017 and 005 of February 2018, on ‘Support for Local Content Procurements by Ministries, Department and Agencies of the Federal Government of Nigeria,” he said.
Speaking on broadband, the minister said the Nigerian National Broadband Plan (2020-2025) was created to speed up the growth of broadband connectivity in Nigeria.
Pantami said, “The plan is designed to deliver data download speeds across Nigeria of a minimum 25Mbps in urban areas, and 10Mbps in rural areas, with effective coverage available to at least 90 per cent of the population by 2025.
“This will be at a price not more than N390 per 1GB of data (two per cent of median income or one per cent of minimum wage).”
Nigeria’s Fintech Startups Raised $122 Million in 2019
Financial Technology Startups in Nigeria Raised $122 Million in 2019
Financial Technology (fintech) startups in Nigeria raised a combined $122 million in 2019, according to the Nigerian Stock Exchange (NSE).
Mr. Olumide Bolumole, the Divisional Head of Listings Business, NSE, disclosed this while speaking on the fintech industry and its growth in recent years.
“The Fintech industry in Nigeria continues to gain increasing popularity after taking the lead in Africa and attracting $122 million in funds in 2019.
“At the exchange, we recognise the opportunity to provide a platform where players in the Fintech landscape can have easier access to right-sized capital to fulfil their organisational objectives.
“The NSE is, therefore, committed to developing multiple solutions to address the needs of the Fintech community in Nigeria such as the provision of the NSE Growth Board.
“The exchange will also prioritise collaborations with organisations such as FinTechNGR to ensure solutions from this webinar are implemented for the benefit of the sector,” he said.
However, with just about 200 fintech companies in Nigeria, the sector is still young and just emerging with room for growth, considering the fact that most Nigerians are still unbanked.
Fintech Companies Raised $554 Million in Investment Last Week
Financial Technology Firms Raised $554 Million Investment Capital Last Week
Financial Technology (Fintech) companies raised a combined $554.17 million from investment rounds last week.
A data compiled by Finbold showed the top 25 fintech firms were led by Razorpay and Wealthsimple.
Razorpay, a payment platform, raised $100 million to account for 18.04 percent of the total amount raised during the week. This was followed by Wealthsimple’s $87 million.
Deepwatch came third with $53 million while NYDIG and M1 Finance came fourth and fifth with $50 million and $45 million, respectively.
Other noteable fintechs include Extend $40 million; FOSSA $30.55 million; +Simple $23.75 million; Finexio $23 million; and Sonrai Security $20 million.
On the other hand, Evolve Credit was the last among the 25 companies. It raised $0.025 million while Upside Saving raised the second least fund at $0.42 million. Also, they were the two firms that raised below $1 million in the week under review.
Oliver Scott, a Finbold editor, who spoke on funding in the fintech sector, said “Notably, venture capital is still the primary source of funding for fintech startups. However, new trends indicate a high level of private equity and debt financing. Additionally, more funding activity is concentrated around later funding rounds. The sector is also witnessing a rise in IPOs and acquisitions. Such trends are pointing to a maturing market.”
Forex3 weeks ago
Naira Improves Against Global Counterparts on Black Market
Business2 weeks ago
Buhari Budgets N420 Billion for Npower, Other Social Investment Programmes in 2021 Budget
Government3 weeks ago
#Endsars: Naira Marley Calls Off Protest following Police Invitation
News4 weeks ago
Npower News: Beware of Fake Npower Employment, Ministry Warns Exited Beneficiaries
News4 weeks ago
Laycon Bbnaija Biography, Career and Health Issue
Business4 weeks ago
Npower News Today 2020, Over 5m Applies for Npower Batch C, Selection to be Transparent -Farouq
Cryptocurrency3 weeks ago
Interview with Paul Mak, CEO of Bonded.Finance
Business4 weeks ago
Job Opportunities for Npower Exited Beneficiaries