Nigerian Tech Startups are Leading the Charge in Significant Fundraising in Africa

By Opeyemi Solaru

With a $3 billion dollar valuation, Flutterwave is currently Africa’s biggest unicorn. The Nigerian company, which provides a payment structure for merchants across Africa, raised $250 million in its latest fundraising round, catapulting it to this position.

While this is the latest success of this magnitude for Nigerian tech companies, it is certainly not an outlier. The numbers show that the world is acknowledging the innovation in Africa, and especially Nigeria, and this is leading to significant investments in the tech-startup space.

The African tech ecosystem by the Numbers

2021 was a record-breaking year for African tech companies. According to estimates, start-ups raised over $4.3 billion. Most of this funding went to companies in South Africa, Kenya, Nigeria and Egypt, but startups in Nigeria alone raised over $1.5 billion, just over 30% of the total amount raised. More of these companies raised over $100 million than ever before .

The data also shows that fintech solutions companies attract the largest amount of funding with over 50% of the raises going to the sector in 2021, but other sectors like health, logistics, and agriculture tech are not far behind.

However, not all the numbers coming from the ecosystem are positive. The gender disparity for female founders is significant across the continent and is particularly bad in Nigeria with >95% of funding going to male-led teams and male founders.

Despite this, the past few years have shown growth for tech startups across the continent. Year on year, the raises increased by 28% from 2019 to 2020, and by a whopping 150% from 2020 to 2021. While Nigeria saw a fall during the pandemic, the huge increase in 2021 proves that Nigeria will likely remain one of Africa’s most important tech hubs for the foreseeable future.

This year is also shaping up to be a significant year for Nigerian tech startups. Apart from Flutterwave, notable mondey raised so far include $40 million raised by the health tech company, Reliance Health, and $15 million raised by Bamboo, the investment app.

What the Numbers Mean

These numbers show an immense opportunity for growth within the tech startup ecosystem in Nigeria. Investors are looking for ideas and companies that provide creative solutions, and Nigerians are proving they have them. And as more and more companies successfully raise significant amounts, it signals to the rest of the world that African start-ups are viable and worthwhile investments.

The gender disparity we see in fundraising in Africa is a significant problem, but even this can be framed as an opportunity for female founders. As data continues to highlight this issue, there has been a push for more diversity in tech fundraising. In fact, companies like First Check Africa, founded by two Nigerian women, are springing up to solve this problem by creating funds solely to invest in female-led founders.

There has never been a better time to be a tech company in Nigeria. Companies like Flutterwave are proving that Nigerians are capable of creating sustainable, innovative solutions to solve unique problems, in a way that is ultimately profitable, and the world is taking note of this.