A new report by TLP Advisory, a Nigerian venture law firm, reveals that 51% of startups in Nigeria face significant challenges in securing funding, with currency volatility and limited access to investors cited as the primary barriers.
The report, titled “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,” was launched on Tuesday, November 19, offering a detailed analysis of Nigeria’s startup landscape over the past ten years. It highlights the growth of the ecosystem, as well as the ongoing challenges, especially amid the country’s economic instability.
Despite a record $3 billion in venture capital investments in 2021, over half of the startups surveyed reported that securing funding remains a major obstacle. According to the report, “51% of startups surveyed reported difficulties in securing funding, largely due to currency volatility and limited access to investors. Angel investors have proven essential during this period.”
In addition to funding challenges, the report identifies other key obstacles for Nigerian startups, including regulatory hurdles and difficulties in talent retention.
TLP Advisory, which has been involved in some of the continent’s largest tech deals, called for deeper collaboration between startups and corporations, increased investment in talent development, and more active engagement with policymakers to create a supportive business environment.
The report also recognizes significant players in the ecosystem, such as early investors like Olumide Soyombo’s Leadpath, and enablers like CcHUB and the Lagos Angel Network, who have played pivotal roles in the growth of Nigeria’s venture ecosystem.
Co-founder of TLP Advisory, Odunoluwa Longe, commented, “Despite the current tough macroeconomic climate, engaging with participants in this project has reignited in me renewed hope and optimism for our ecosystem. We embarked on this project as our way of celebrating the ecosystem that made us, and this report reflects both the resilience and evolution of the Nigerian tech landscape.”
Longe added, “It’s not just about technology; it’s about building a future where founders, investors, and the public sector collaborate to make Nigeria a leader in innovation and digital solutions. Over the past decade, we’ve witnessed incredible success stories born from collaboration and adaptability, and we believe the best is yet to come.”
Adenike Adeyemi, Executive Director of FATE Foundation, pointed out that one of the most unexpected challenges for entrepreneurs in Nigeria has been the unstable and inconsistent regulatory and business environment. She emphasized the importance of a supportive policy framework to unlock the full potential of Nigerian startups.
Kola Aina, Founder of Ventures Platform, echoed this sentiment, stressing the need for more proactive policy engagement.
“The ecosystem must become more deliberate in engaging in government policy design, ensuring we shape the policies that govern our industry,” Aina said.
The report’s findings underline the resilience and adaptability of Nigerian startups, even as they face a range of challenges. However, it also points to the need for continued investment, collaboration, and policy reform to help these businesses thrive in a competitive global market.
