Nigeria Startups Raise $2.5Bn in Funding in 5 Years
Startups in Nigeria have raised about $2.5 billion in the last five years, representing aggregate funding, which startups received between 2017 and last year.
For instance last year, startups operating across several sectors raised $1.37 billion, according to various data explored by The Nation.
This was out of about $4 billion funding that startups in Africa received.
One of the biggest success stories was Chipper Cash, which raised a total of $250 million. On the whole, Nigeria boasts of over 200 deals for the year.According to analysts, financial technology services contributed 73.5 percent as Nigerian startups raised $1.09 billion. In 2020, Nigerian startups raise $117,481,508.
The key companies, which benefited from funding included Flutterwave,54 Gene, Helium health,Kuda bank,TradeDepot,Field Intelligence, Medsaf, Autochek and Rensource.
In 2019, Nigerian tech startups got $663.24 million out of the $1.34 billion raised in funding in Africa, according to the Decoding Venture Investments. Foremost among them were Interswitch, OPay, Andela and Palmpay, which accounted for most of the top venture deals on the continent.
In 2018, startups raised $ $178.3 million. That year, Google gave out $2million in grants to 12 Nigerian companies in the inaugural African edition of the Google Impact Challenge.
In 2017, out of the $560 million technology startup investments that entered Africa, Nigeria earned $114.6 million. The country ranked third after South Africa and Kenya, which got $167.9 million and $147 million. The three countries accounted for 76 per cent of the total funding that came into the region last year.
According to Global System for Mobile Communications (GSMA), investment in the tech startup ecosystem has been growing. So far, Kenya, Nigeria and South Africa remained the most popular investment destinations.
According to Disrupt Africa, the amount of funding raised on the continent has been on the rise since 2017.
In 2017, startups in Africa raised $195.06million; $334.52million in 2018; $491.62million in 2019; and $701.46million in 2020.
This year there is an indication more funding is coming for startups across the country. Multi-merchant rewards platform ThankUCash has raised US$5.3 million in seed funding as it plans expansion into new markets and further product launches.Co-founded in 2018 by Simeon Ononobi, Suraj Supekar, Madonna Ononobi and Harshal Gandole, ThankUCash offers cashback on purchases and deals from thousands of merchants, which in turn helps merchants retain customer loyalty, increase revenues, and grow.
The company operates in Lagos, Abuja and Port Harcourt, and plans to use the funds to scale operations to other cities across the country, and expand to Ghana and Kenya. It will also introduce two new products, a remittances service and a “buy now, pay later” (BNPL) infrastructure.
Also, credit management fintech startup, BFREE has raised a $1.7 million pre-Series A funding round and strengthened its management team ahead of global expansion.
Founded in August 2020 by Chukwudi Enyi, Moses Nmor and Julian Flosbach, BFREE offers ethical digital-first credit collection solutions for financial institutions in emerging markets. The startup manages collection processes for more than 30 digital lenders, microfinance banks, and commercial banks in Nigeria and Kenya.
This week, Silicon Valley-based accelerator, Y Combinator which played a role in companies such as Flutterwave, Paystack, Kobo360, Cowrywise, Kudi, among others said it has increased its standard deal size to US$500,000.Until now, YC invested US$125,000 for seven per cent equity.
