While Lagos often dominates the narrative surrounding Nigeria’s tech scene, a coalition of investors and founders is actively working to cultivate a vibrant and dynamic tech ecosystem in Northern Nigeria.
A recent Techpoint Africa podcast highlighted the overconcentration of Nigeria’s tech ecosystem within Lagos, a trend corroborated by Disrupt Africa’s data, which reveals that a staggering 88.4% of Nigerian startups are headquartered in the state. This concentration is unsurprising, given Lagos’s robust internet infrastructure, substantial population, and significant venture capital inflows in 2022, reaching a remarkable $750 million.
However, a dedicated group of investors and founders are determined to shift this narrative, positioning Northern Nigeria as a burgeoning tech hub.
Their initial endeavor is a comprehensive report, “The Northern Tech Ecosystem Report,” which surveyed 188 startups across the region. The report underscores the dominance of three states: Kano, Abuja, and Kaduna, collectively accounting for over half of the region’s startups.
A striking observation is the prevalence of “dev shops” in Northern Nigeria, a trend that diverges from the broader continental landscape.
“Given Abuja’s status as the nation’s capital, a significant number of companies are focused on servicing government sectors and developing software solutions tailored to their needs,” explained Surayyah Ahmad, Founding Partner at TT Labs and Chairman of the Northern Founders Community.
Beyond software development, the agricultural and food processing sector emerges as a key player, with prominent startups like Tomato Jos, Baitus Foods, and Thrive Agric leading the charge. Edtech, fintech, and e-commerce also constitute significant sectors within the region. This focus on agriculture is unsurprising, considering the region’s substantial agricultural workforce. However, the pervasive issue of insecurity poses a significant challenge to agricultural activities and, consequently, the growth of related startups.
While the nature of startups in Northern Nigeria may differ from national trends, the demographics of founders exhibit some similarities. The overwhelming majority of founders are male (76.6%), with a significant proportion falling within the 26-35 age bracket.
Furthermore, the majority of founders possess a bachelor’s degree, with a smaller but notable percentage holding PhDs. Reflecting the youthful demographic of founders, most startups in the region are less than three years old and employ small teams of 2-5 individuals.
Financial constraints, limited support infrastructure, and a shortage of skilled talent represent significant hurdles for startups in the region. A substantial number of startups reported challenges in securing initial funding, and many continue to grapple with financial limitations.
The limited presence of successful startup founders and investors within the region further exacerbates the challenges faced by aspiring entrepreneurs.
Kola Aina, General Partner at Ventures Platform Fund, emphasized the critical need for mentorship and role models. “While successful founders and startups exist in the North, greater efforts are needed to proactively mentor and inspire the next generation of entrepreneurs,” Aina stated.
Despite these challenges, the group remains optimistic about the region’s potential. The burgeoning population in Northern Nigeria, growing at a rate significantly faster than the southern part of the country, presents a unique opportunity for startups to tap into a vast and expanding market.
The region boasts success stories such as Sudo Africa, a Kaduna-based fintech startup that secured $3.5 million in funding in 2022, and YDS, an Abuja-based company that has achieved significant growth.
The coalition is actively working to address these challenges, including plans to train accelerator and incubator owners on best practices for nurturing world-class startups.
A significant milestone will be the launch of a $10 million fund before the end of 2023, with a mandate to invest at least 50% of its capital in Northern-based startups.
“Funding is a critical catalyst,” emphasized Ahmad. “Many startups have achieved impressive revenue growth through bootstrapping. Access to funding will enable these companies to scale more rapidly, inspiring other entrepreneurs within the ecosystem. This will create a multiplier effect, empowering staff within these successful startups to launch their own ventures.”
