An Investor’s Guide To Nigeria’s Technology Market
Bustling with a population of 200 million people and the largest market in Africa, Nigeria is uniquely positioned as a hotbed of innovation and technological advancement. Nigeria is Africa’s largest ICT market, accounting for about 29% of internet usage in Africa. The Nigerian Communications Commission (NCC), in May 2021, reported that Nigeria had more than 160 million active mobile telecom subscribers of GSM.
Nigeria is one of Africa’s ‘big four’ start-ups ecosystem, besides Egypt, Kenya, and South Africa, and it spots about 481 active start-ups as of August 2022. Though interest in the Nigerian tech economy seems to have increased in recent years, and more investors are willing to inject money into start-ups, technology companies are not particularly new in Nigeria. Interswitch, Nigeria’s foremost technology company, was founded in 2002. However, the majority of the 481 active start-ups were launched after 2011. Interswitch has raised about US$320.5 million to date, with US$110 million raised before the close of its last funding round of May 2022 from a private equity fund. This demonstrates the depth of the market and the potential for scalability and growth.
The evolving business environment presents endless possibilities that showcase Nigeria as a rewarding target for foreign direct investment. Between January 2015 and August 2022, the total funding volume raised by technology companies is estimated at US$2,068,709,445. The five biggest deals in the tech ecosystem in 2022 were Flutterwave with a record US$250 million, Interswitch with US$110 million in its 15% sell down, Moove with US$105 million, TeamApt with more than US$50 million, and Venture Platform with US$46 million. These deals were dominated by investors from the United States of America and other countries mostly based outside Africa. Significant activities from local investors in 2022, even though they did not make the top five lists.
This work explores the technology scene in Nigeria in areas such as setting up, funding, incentives, innovations, and regulatory activity. It is designed to present a detailed overview for an intending investor in the Nigerian technology industry.