Nigerian government targets three new tech unicorns in 2023

The Nigerian government expects to produce two to three new unicorns before the end of 2023. Isa Ali Pantami, Minister of Communications and Digital Economy said this while speaking on a panel with ministers from other countries at the LEAP technology conference organised by the Digital Corporation Organisation (DCO).

According to the minister, Nigeria has so far led the unicorn counts in Africa with five of the seven known unicorns originating in Nigeria. These include Interswitch, Jumia, Flutterwave, Opay, and Andela.

There were about 16 startups that attended the LEAP Conference in 2023 and benefitted from the Startup Passport commenced by the DCO member countries. Nigeria is currently a significant beneficiary of the initiatives instituted by the DCO, according to the minister.

Pantami said his ministry has continued to support tech startups in the country, especially with the Nigeran Startup Act which was signed into law in 2022.

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Nevertheless, Nigeria as well as the African tech ecosystem did not record any tech unicorns in 2022 due to the economic headwinds that impacted the global tech industry and led to the highest layoff of over 150,000 tech workers. The layoff activities have continued in 2023 with January recording the highest number of workers laid off by tech companies. Experts say the layoffs will continue and the venture capital, as well as private equity firms, are warier of making deals.

The low funding activity has also put the unicorn status of some companies in question. Recently, Ola Brown, founder of Flying Doctors and tech investors suggested that some African unicorns may have lost their valuation.

“Valuations are cyclical, they go up and down with the market. Currently, fintech stocks are 8x to 10x. Not sure if you convert with street rate anyone s doing >$100m revenues? So maybe no unicorns left, for now,” Brown said.

But Africa welcomed a new unicorn in February with the announcement that MNT-Halan has managed to secure a whopping $400 million in equity and debt financing at a $1 billion valuation.

The round includes $260 million in equity financing and $140 million in debt funding through two securitized bond issuances secured within the past year. About $200 million of the investment came from Abu Dhabi–based Chimera Investments in exchange for 20 percent equity.

Pantami who has less than 6 months to leave office as Minister was not forthcoming on how the new unicorns from the Nigerian ecosystem would be minted or what new role the government plans to play to make it happen.