Nigeria, once the undisputed champion of African startup funding, experienced a decline in 2023, raising $575 million compared to $805 million in Kenya and $675 million in Egypt.
While this dip may cause concern, it’s crucial to consider the broader context. The global economic slowdown significantly impacted venture capital investment worldwide, and Africa was not immune to this trend. Furthermore, the Nigerian economy faced challenges such as the 2023 general elections and the naira devaluation, which created uncertainty and impacted business operations.
Despite these challenges, the fundamentals of the Nigerian startup ecosystem remain strong. Nigeria boasts a large and youthful population, a burgeoning middle class, and a growing demand for innovative solutions across various sectors.
“The Nigerian market still presents immense opportunities for startups,” says Anthonio Pinheiro, COO and Head of Portfolio Support at Ingressive Capital. “While the overall funding volume may have decreased, there remains significant interest from investors in identifying and supporting high-potential Nigerian startups.”
Maxime Bayen, Partner at Catalyst Fund, echoes this sentiment. He emphasizes that Nigeria continues to attract a significant number of high-quality startup applications and remains a fertile ground for innovation.
The decline in funding should not be interpreted as a sign of weakness, but rather as an opportunity for Nigerian startups to refine their strategies, demonstrate resilience, and attract the right investors.
“This period presents an opportunity for founders to focus on building strong fundamentals, demonstrating clear value propositions, and achieving key milestones,” says Pinheiro. “By focusing on building sustainable and impactful businesses, Nigerian startups can navigate the current challenges and emerge stronger in the long run.”
