Nigerian startups

Nigerian startups is responsible for a larger part of the funding raised in the West African region over the last 10 years. Of the over $1.8 billion funds raised by Millionaire West African Startups (MWAS) between 2010 and 2019, Nigerian Startups has a lion share of 97.9%. This is report was recently released by West African Startup Decade Report by Techpoint Africa.

MWAS are Startups founded in the West African region with at least one West African co-founder and have raised at least a million dollars cumulatively between 2010 and 2019.

Nigerian startups Contributed 97.9% of the $1.8b Funds Raised in West Africa in the Last 10yrs

E-commerce sector saw the highest funding

E-commerce has been the most lucrative sector with 59.9% of the total funding raised being attributed to the sector. Financial Services and Human Resources, complete the list of the top three industries in terms of funding during the decade.

Breaking down the report, Jumia led the charts contributing 54.6% of the total amounts raised while OPay led the financial service chart with 48.5% of the total amount raised by the industry. In the Human resource sector, however, Andela single-handedly contributed 99.5% of the funds in the sector.

9.4% of the total funding came from accelerated startups.

On the flip side, 5.9% of the MWAS have shut down while only 1 has managed an initial public offering in the last 10 years.

Funding Activities

The Online Retail and Financial Services industries are the only two sectors in the West African tech startup space that record major hits with respect to funding within the decade.

In the telecoms sector only established telecom operators raised significant funds (> $1 million) cumulatively. In the Mobility and Logistics industry, startups didn’t start raising in millions until 2014 and it was not
until 2018 that they raised more than $5m in a year.

A majority of investments in the region in the last decade came from outside Africa. According to the report, 81.3% of investors between 2010 and 2019 were foreign with 50.6% coming from the US.

Nigerian startups Contributed 97.9% of the $1.8b Funds Raised in West Africa in the Last 10yrs

The peak investment of the decade was raised in 2016 as startups raised a cumulative $529.049 million. The number of deals has however been growing steadily from 0 in 2009 to the highest number of 33 in 2019.

10% of the Founders are Female

Examining the nationality of the founders shows that 85.7% of the founder are of African origins. It also revealed that each Startup had a founder with at least a bachelors degree.

Nigerian startups dominated the founder’s list as 86.3% of MWAS had a Nigerian on their founding team.

Of the 51 MWAS, 44 had a Nigerian on their founding team; Ghana had five while Côte d’Ivoire and Senegal had one each.

In terms of gender, the founders’ list was dominated by men. Women represented 10% of the founders and startups with a female co-founder accounted for 20.1% of the total amount raised during the decade.

Y Combinator accelerated the highest number of MWAS

Amon the MWAS examined in the report, US-based accelerators had the largest share with Y combinator accounting for 8 and Techstars accounting for 6. Nigeria’s Co-creation Hub had just 1.

Nigerian startups Contributed 97.9% of the $1.8b Funds Raised in West Africa in the Last 10yrs

In terms of funding, Y Combinator led the pack with its startups raising $88 million. Techstars follows with $60.5 million and 500 Startups raised $8.4 million.

The total funding raised by MWAS that passed through the Y Combinator accelerator programme was higher than that of any other accelerator

In summary, startups in West Africa have seen a considerable amount of funding raising over $1 billion. The e-commerce and financial sector had a good decade with logistics and Agricultural sectors also showing great promise.