Yaba emerges as Nigeria tech enclave

“They’re all clustering in Yaba. The momentum is there,” said Sim Shagaya, CEO of Konga, which has become one of Africa’s biggest online retailers after being set up in 2012.

Konga’s decision to move in 18 months ago was a major boost for Yaba, which draws on a pool of talent from the nearby University of Lagos and Yaba College of Technology.

Investors have taken an interest in several start-ups based in the district in the last few months.

In May, Nigerian hotel booking company hotels.ng got seed funding from the EchoVC Pan-Africa Fund and the Omidyar Network, founded by eBay mastermind Pierre Omidyar.

Then in June, Andela, a Yaba-based company that trains and then outsources software programmers and developers, received financing from Boston-based venture capitalists Spark Capital.

Andela, which launched last year, has so far selected 70 people from more than 12,000 applicants to participate in the programme that co-founder Jeremy Johnson said would, over time, create a bigger pool of developers in Nigeria’s workforce.

“We’re preparing brilliant young people not only to compete for opportunities in the years ahead, but to build the companies that will transform Africa,” he said.

The potential market size of Africa’s most populous nation makes Nigeria, with around 170 million people, an attractive location.

“From an investor’s perspective, Nigeria is so much bigger. The Kenyan market is very small,” said Kresten Buch who has invested in tech start-ups in South Africa, Kenya and Nigeria.

The gross domestic product of Lagos state alone, for example, is bigger than the entire economies of Kenya or Ghana.

However, Yaba started life in a similar way to other African tech enclaves in 2010, with one building earmarked as an incubator for talent supported by overseas investors, in this case the Co-Creation Hub (CCHub), backed by the founder of eBay.

The government chipped in with another building in 2013, the Information Technology Developers Entrepreneurship Accelerator (iDEA), for would-be entrepreneurs to get access to docking stations, meeting rooms and mentors.

Google and Microsoft ran coding workshops, while a deal between CCHub, the Lagos state government and local telecoms firm MainOne brought cheap high-speed Internet via fibre optic cable.

Even though it is Africa’s biggest economy and top oil producer, Nigeria’s Internet speeds and network coverage have lagged behind other countries such as Ghana and Kenya.

But that in itself is an opportunity, with a 2013 report by consultancy McKinsey suggesting that only 1.5 percent of Nigeria’s nearly $500 billion economy took place online.

“Nigeria has the advantage of having a very big local market,” Buch said. “You can get very big by just looking at Nigeria.”