The Land of Startups in Africa – How did Nigeria manage to attract $ 1.8 billion in 2021? Last week we went to the Nigerian capital, Lagos, where we spent five days with a number of Egyptian entrepreneurs on a discovery tour through the country that has received the bulk of the funding for start-ups over the past year. In total, Nigerian startups raised $ 1.8 billion, with the largest round of funding reaching $ 400 million.
our direction Down there to find out why Nigeria is attractive to Africa-focused investors. At the initiative of Ali El Shalakany, CEO of Cairo Angels Venture Investment Company, two Egyptian start-ups and a Cairo Angels portfolio company traveled from Kenya to Lagos to explore the country’s startup scene, and we joined the journey to learn more to find out about Nigeria’s secret sauce. To do this, we heard insights from one enterprising investor and two angel investors: Omobola Johnson., Principal Partner of Venture Capital Company TLCom Capital and Former Minister of Communications and Information Technology of Nigeria, andBio Alabai Founding partner of Attica Ventures and Vice President of Angel Investor Network in Lagos,Tommy Davis Co-president of TVC Labs and our associate.
And if you missed the details of our trip last week, you can check it out at here: Enterprise explores Nigeria’s startup landscape
| first day | second day | Third day | Goodbye Lagos.
Before we reveal the reasons for Nigeria’s record funding year, we need to establish a context to talk. From what we have heard and seen over the past week, the prevailing ideas among investors have been focused on the continent as a whole, not countries. Davis is an investor who has been actively working to build bridges through angel investment networks across Africa to move the continent forward, and that has also been the focus of our journey. All in all, stakeholders are eager to work together across borders and work to solve the continent’s problems.
“I tried to build this bridge [بين مصر ونيجيريا] Since the period “, Davis says. Davis has been in contact with El Shalakany, Khaled Ismail, managing partner of HI Mangle, and Tariq El Kady, chairman and co-founder of Angel Investment Network Alex Angels, to bring the perspectives of angel investors to the continent. Davis followed suit in the Kenyan capital, Nairobi, and South Africa. Johnson thinks the start-up centers in Africa are Egypt, Nigeria, South Africa and Kenya, given the amount of investment that these countries have attracted.
And we’ve heard of quite a few companies and institutional investors operating across the continent, Like TL Com Capital, and Future Africa Collective. Their main purpose is to fund and support beginners who solve problems affecting large populations across the continent.
But the goal is not just to raise more funding, But it also extends these partnerships to other areas. Davis wants angel investors to expand into areas such as smart cities, sustainable agriculture and clean energy. “This year I am working on creating three African Angel Investment Networks in these activities,” said Davis.
Why these domains? Because these are the areas where Africa is lagging behind, unlike fintech, for example, which is gaining tremendous momentum, says Davis.
So, what has attracted Nigeria all this funding over the past year?
the size: Nigeria is a densely populated country, which makes it attractive for investment, Johnson says. “Nigeria is a big market in terms of the market and the size of the problems,” she added, which is reason enough, I think, to set up a venture capital firm in Nigeria.
Population that does not have banking services: There is a large population without a bank: about 36.6 million adults are financially excluded, according to a survey by the sector development organization EFInA. Fintech explodes here, with some on our journey realizing that there is a Fintech startup almost every second. But does that mean there are a lot of fintech companies in the country? not necessarily. Alabi believes there are still a number of payment solutions that need to be introduced.
Cellphone penetration is very high: The mobile penetration rate in Nigeria is 82.4%, according to a report by Data Report. “Nearly 65 percent of the country’s population is under the age of 35 – these are people who have never lived in a world without a cell phone,” Alabi said. She added that the mobile phone is a top priority for the Nigerian citizen.
Poor infrastructure: As we briefly mentioned in our Enterprise Special Flight Log, Nigeria does not have adequate basic infrastructure. There is a lack of energy infrastructure, Davis says, and that “gives us an advantage”. It opens doors to real solutions to existing problems, and pushes Nigerians to enter green energy – for example – early and find an alternative to the basic power distribution network.
Availability of capital. “There was a lot of capital,” Johnson said. [المخصص للشركات الناشئة] In the United States that had nowhere to go, so I decided [الصناديق] “Transforming its destination to Africa.” Nigerians describe themselves as “a nation of entrepreneurs,” which we have heard from quite a few people. “Building things is not foreign to us,” says Alabi, adding at that everyone has a side-print and everyone Davis: “We are entrepreneurs by nature.”
Next week – We will see how the start-up scene in Nigeria is expected to develop in the coming months (hello, initial rounds?), What challenges they face, and what Egyptian beginners who want to expand to the country should consider before tackling it.
Top starting news of the week:
- Egyptian mental health platform “Ask” receives funding $ 1.7 million Out of the A15 box. The new funding represents the last tranche of the company’s initial $ 3 million funding round, in which the fund specialized in investing in technology in full.
- Cylinder, the digital platform for buying and selling used cars, has brought together $ 12.6 million In a pre-incorporation funding round It was led by venture capital fund Raed Ventures. The start-up will use the funds to expand its operational and technical capabilities, promote its services and hire new employees.