Nigerian startups are more likely to undergo some form of incubation or acceleration than those from any other African country, with almost half the country’s startups having taken part in some kind of programme.
That is according to the Nigerian Startup Ecosystem Report 2022, released by startup-focused news and research company Disrupt Africa, which utilises Disrupt Africa’s datasets, expertise and networks to document what startups are doing what in the country, who is making investments, and who is providing ecosystem support.
It is released in partnership with Quona Capital, a venture firm focused on fintech that can expand access for underserved customers and small businesses in emerging markets; Sabi, Africa’s leading provider of commercial infrastructure for the distribution of goods and services; and MAX, which is building Africa’s largest mobility-tech platform. Other partners are Talking Drum Communications, Newtown Partners, Kwik, and LipaLater.
The publication takes as its starting point a list of 481 Nigerian tech startups for which enough data was available, and finds that 45.1 per cent of these companies have been “accelerated” or “incubated” in some form or other.
“Nigerian startups have access to extraordinary levels of ecosystem support, with almost half the 481 companies tracked by this report having undergone some form of acceleration or incubation since they were formed. In all, 217 companies have taken part in either a local or an international accelerator or incubator, with this 45.1 per cent figure better than the 38.6 per cent witnessed in Egypt and far outstripping the 25.7 per cent rate seen in South Africa,” the report said.
Many of these startups accessed such support services from the Lagos-based Co-Creation Hub, which has been active since 2011, but there are a host of other programmes that have been active since. Meanwhile, Nigerian startups are also more likely than those from elsewhere on the continent to be selected for renowned international programmes such as Y Combinator and Techstars.
Almost 20,000 people – 19,334 individuals in total – are employed by Nigerian tech startups, dwarfing the 11,340 employed by their counterparts in South Africa. The average headcount per startup stands at 40. The fintech sector accounts for almost half of Nigerian startup employment, with 8,653 jobs, while between them the fintech, e-commerce, mobility and logistics, and e-health spaces account for 74.9 per cent of all jobs.
The country performs less well when it comes to gender diversity, with just 15.6 per cent of Nigerian tech startups having at least one one woman within their founding team. This means the ecosystem is more diverse in this regard than Egypt and South Africa, yet this figure is still far too low for a leading ecosystem such as this.
“Though the newer generation of startups are more likely to be female-founded, and a handful of venture capital firms are especially focused on backing female entrepreneurs, with almost 85 per cent of ventures solely male-founded, there is clearly work to be done to ensure more women become leaders within the country’s startup landscape,” the report finds.
“Nigeria has long been a pioneering startup ecosystem on the African continent, leading the way in various sectors and increasingly becoming a focus for investment. It is high time we dug deeper into its growth, and this report does just that. We hope it serves as a valuable resource for both those already active in Nigeria and those looking to start doing business there soon,” said Gabriella Mulligan, co-founder of Disrupt Africa.
“It is core to our identity as a company that we offer entrepreneurs – both active and aspiring – access to pivotal information, resources and opportunities with which to take their businesses to scale. The democratisation of data, and the release of detailed industry reports free of charge, is central to that, and with that in mind we hugely appreciate the assistance of all our partners, who are doing their bit to ensure this report reaches as many people as possible,” said Tom Jackson, co-founder of Disrupt Africa.
“As a venture capital firm firmly invested in the success of African startups, Quona is pleased to support Disrupt Africa’s endeavour to make this informative report freely available to the broader ecosystem,” said Kofoworola Agbaje, senior investment associate at Quona Capital in Lagos. “Nigeria’s fintech startup scene is responsible for some of the most interesting innovations on the continent, and we’re delighted to help shine a light on its progress.”
“What we are trying to do at Sabi, is be a platform that is enabling businesses across the value chain, get to the next level and be more efficient in what they do so that everybody has a better net benefit,” said Anu Adedoyin Adasolum, CEO of Sabi.
“At MAX, we believe that the key to unlocking Africa’s incredible potential is to help people and goods move from point A to point B. Unfortunately, systemic infrastructure and resource challenges mean it is unlikely that it will be governments or large corporations that will solve this challenge. Instead, we believe that the solution lies in empowering entrepreneurs – and that technology platforms like MAX will be vital for doing so. Like MAX, innovative businesses across Nigeria are creating new solutions to some of our continent’s most pressing challenges. It gives us great pleasure to partner with Disrupt Africa to share some of the remarkable progress being made, through the publication of the Nigerian Startup Ecosystem Report 2022,” said Adetayo Bamiduro, CEO and co-founder of MAX.
“We are excited to partner with Disrupt Africa to make this research about Nigeria’s growing startup ecosystem freely available to anyone that wants to explore and take advantage of the opportunities that are emerging. Disrupt Africa has been at the forefront of championing Africa’s emerging startup ecosystem for a while, and we are thrilled to be supporting the team to provide more analysis and insight to drive a progressive narrative about technology and innovation in Africa,” said Olugbeminiyi Idowu, managing director of Talking Drum Communications.
“Nigeria’s startup ecosystem has grown incredibly quickly over the past five years and holds exciting opportunities for the future. As an active investor in Nigeria, we are eager to see the advancement of the Nigerian tech ecosystem through knowledge-sharing and collaboration between local and international players. We are therefore delighted to support this initiative by Disrupt Africa to make this ecosystem report freely available to all stakeholders,” said Llew Claasen, managing partner of Newtown Partners.
“In a very short time, Disrupt Africa has made itself an indispensable tool for startup founders in Africa. We are very happy to partner with them,” said Romain Poirot-Lellig, founder and CEO of Kwik.
“The African startup ecosystem has experienced remarkable growth with impressive achievements. Reliable and informative reports about the ecosystem raise the profile of our sector beyond Africa, and that interest helps to drive investments in productive startups. We are thrilled to partner with Disrupt Africa on the Nigerian Startup Ecosystem Report to drive data and insights on startup and investments in Nigeria, shining the light on Africa’s expanding ecosystem and enabling innovators to do more while indicating to the various ecosystem players better and more innovative ways of supporting local businesses to make strides,” said LipaLater Group CEO Eric Muli.
The Nigerian Startup Ecosystem Report 2022 is available to all for free, making the data and analysis contained in its pages accessible to those for whom the information is most valuable – entrepreneurs.
The publication, which is the 18th released by Disrupt Research, is over 50 pages in length and provides a detailed overview of the Nigerian startup ecosystem and its development over the last 5-10 years. It involves analysis as to what areas startups are active in, a detailed look at funding and M&A trends, and detail the range of startup support services available to Nigerian entrepreneurs, including hubs, incubators, accelerators, and government, corporate and university initiatives.
