Venture capitalists, angel investors and peer-to-peer lenders are finding Nigerian start-ups more attractive by the day as they enter into luscious deals worth millions of dollars with them.
While some of these deals are equities, others are either loans or grants. Such deals are enabling startups to eye global opportunities and new markets, competing with the best across the globe.
ibakatv is a platform sells online Nollywood movies to Africans in the Diaspora who pay in dollars. After an initial N100 million pumped by investors, the firm got $2 million in equity, amid other deals. It now boasts of over one billion views on both YouTube and its own platform.
“We are already ‘millions-dollar’ company,” Blessed Idornigie, chief executive officer of IbakaTV, told BusinessDay in a recent interview.
“We will get there in the next couple of years, looking at what we have on ground,” he added.
Already, Nigerian fintech startup, TeamApt, has raised $5.5 million funding in a Series A round. The funding round was led by Quantum Capital Partners owned by Zenith Bank founder, Jim Ovia. Market watchers say the fund will enable TeamApt to launch AptPay app and position it to compete in Africa’s financial space.
A report by Techpoint Africa says that Nigerian start-ups raised $178.44 million in 166 deals in 2018. Sectors that received funding from investors included tech, fintech, e-health, and agribusiness, among others. While Cellulant, a fintech got $47 million, Mines, another similar company, received $13 million. Paga and Paystack secured $10 million and $8 million respectively.
Lidya, an online lending firm, received $6.9 million, enabling it to fund more petty traders and other emerging sectors such as technology firms. PiggyVest got $1.1 million in 2018.
FarmCrowdy, an agritech firm, secured $325,000, just as Asoko Insights, an investment information provider, received $3.6 million. Similarly, LifeBank, a health start-up, garnered $362, 000, just as Tibexi, an internet service provider, secured $3 million. More so, Google gave $2 million to 12 Nigerian start-ups in late 2018.
Another report by Disrupt Africa said 58 Nigerian start-ups secured $94.91 million in funding in 2018.
The report said Nigeria was tops, followed by South Africa, which had 40 businesses raising $59.97 million.
The Tony Elumelu Foundation has picked 1,000 beneficiaries for the 5th edition of its empowerment programme for the year 2019. The programme, which disburses a non-refundable $5,000 to business owners, has a 12-week training programme, business promotion, access to mentors and many other opportunities.
Honeywell’s Itanna has opened applications for the 2nd edition of its four-month accelerator programme for start-ups. Ten beneficiaries will receive $ 30,000 as well as trainings and other opportunities.
Also, Y Combinator provides seed funding for start-ups at the earliest stage of venture funding and pays expenses for the business while starting.
A recent Venture Capital report by WeeTracker, a global tech media platform that monitors start-up ecosystem across countries, claimed that investment deals in Nigeria in 2018 increased to 136 in 2018, from 34 deals in 2017.
Analysts say Nigeria is gradually becoming a major tech hub in terms of start-ups generation and entrepreneurs’ preferred location for investments.
“Digital companies in Nigeria have created thousands of jobs and activities within the ecosystem and this is striving to consolidate the nation’s status as a top-notch international hub by attracting investors and stimulating entrepreneurship in the country,” Oo Nwoye, executive director, Tech Circle, said.
Nwoye stated that Nigeria was transitioning into a dynamic ecosystem offering start-ups a platform to potentially grow into million- dollar businesses.
“Last year, tech companies such as Paystack and FlutterWave received huge funding from abroad to strengthen their mobile payment solutions,” he said.
Kola Aina, co-founder, Venture Platform, said Nigeria was going to witness the emergence of numerous fintech start-ups, with investments coming in from both public and private investors.
He explained that there were growing opportunities in IT, biotech and other fields, drawing young, educated professionals who became entrepreneurs.
Ibrahim Tajudeen, head of research, Chapel Hill Denham explained that the demography of Nigeria was helping to attract start-up investments.
Uche Aniche, the convener of StartupSouth, said that the Nigerian eco system had undergone a transformation in recent years.
“Thanks to the wave of fresh young talents. Lots of start-ups and small businesses have taken off, creating a surge of co-working spaces and a collaborative spirit vital for the success of innovation hubs,” Aniche said.
ODINAKA ANUDU & GBEMI FAMINU
