In 2012, Mike Butcher of TechCrunch wrote an article on the African tech scene that caused a lot of backlash. He said: “The consensus on the ground among seasoned AfricaTech watchers is that while Nigeria has the fastest growing economy, it’s also pretty dangerous at the moment.”
There was a lot of negative news about Nigeria at the time, as terrorism had just gained full steam. We tried to correct the impression in many online conversations and explained that the violence was limited to remote parts of the country. It was an uphill task as people were wary.
Mike Butcher and others were right about one thing, Nigeria was the fastest growing economy, and we also had (and still have) a very young population coming into adulthood. The shifting demographic was a massive opportunity as older institutions could not meet new market demand.
They could not innovate quickly enough to provide unique products. It was a great place to start and test new ideas. We had the fastest-growing African population at the time, and launching internet companies to serve the market became almost inevitable.
Nigeria defied the stereotypes. In 2012, launching a $10 million fund for startups in East Africa was a big deal and a newsworthy item on Techcrunch. Still, 10 years later, we have a Nigerian startup raising hundreds of millions of dollars and now worth $3 billion. That is impressive progress in 10 years by any standard. The story is only just beginning, and as Jeff Bezos of Amazon keeps saying – it is still Day 1.
The journey
Nigeria’s tech startup journey started decades before 2012 but experienced several discontinuities. Each time there were economic challenges and currency devaluation, a massive brain drain followed. Many talented people who could have built impactful companies all moved abroad. I left twice myself and returned.
Very few people remember that Nigeria’s Tara Systems once built a core banking platform called Microbanker implemented widely outside the country and in many American banks. SocketWorks Global (the first venture-funded startup in Nigeria and possibly Sub-Saharan Africa) built C-Portal, used in universities as far away as Sri Lanka.
A country already exporting software over two decades ago always lost the edge each time there was economic hardship. This problem left our market wide open for others to capture with software products. We still import a lot of software today despite all the recent progress we have made. It is still Day 1 in Nigeria.
One of the best things to happen to Nigerian tech two decades before Flutterwave became a Unicorn was the deregulation of the telecommunications sector and licensing of GSM companies. These companies transformed our national infrastructure and created more jobs and possibilities. We built entirely new businesses now employing millions today because of that regulation.
Licensing of telcos was one of the most consequential regulatory interventions that helped the progress of Nigerian technology.
It opened the market for digital products like Blackberry and others at scale, and it also made it possible for a young person like Elvis Chidera to learn how to code just from his phone. Many things became possible as connectivity to the Internet also became ubiquitous.
Bank consolidation created more viable players who invested heavily in technology for their operations. Banking and payments also benefited from favorable regulations and interventions. Electronic payments industry guidelines by the Central Bank of Nigeria allowed organizations like Interswitch and NIBSS to emerge. The problem was that all of these organizations still broadly used foreign software products.
The founders of Flutterwave worked in banking and saw the opportunity for new locally built products to serve our fast-growing economy better. After launch, they were so successful that many doubted that the figures they revealed were accurate. They are authentic and have only grown. We did the seemingly impossible and built a company from zero to $3 billion in just six years.
Flutterwave didn’t do it alone; regulation was very helpful in creating the standards that made investors confident enough to invest in it and others. It also helped to instill confidence in the market.
The future
The story of Flutterwave has been nothing but fantastic. I still remember when the founders were conserving money and couldn’t travel to events to meet potential customers or partners. I saw them grind from the beginning and work hard to win each new deal. That philosophy of pragmatism still drives them today, and it has been the bedrock of their success.
The success of Flutterwave has created more than a buzz in the market. Many investors (including the largest Fintech investor in the world) now have local teams after Flutterwave announced their Unicorn round last year.
For those of us who have been investing locally in the last decade and are fortunate to be associated with this success and tremendous growth, it is also still year 1. There is more to come.
Asemota is a technology entrepreneur and investor who serves as a board member and advisor to leading fintech and investment firms across Africa and globally. He is Board Chair for EdoInnovates, Growth Partner at AnD Ventures, Advisory Board Member at ARM DFS and a member of many other technology startup boards. He is also a Board Advisor to Flutterwave
