Nigeria is leading African travel destination for foreign direct investment in technology start-ups. Between 2015 and 2022, Nigerian technology start-ups received funding a total of just over $2 billion. This is the highest amount of funding recorded by any country in Africa.
The “The Big Four” Countries Nigeria, Egypt, South Africa AND Kenya, are leading the African startup scene. Currently, they constitute approx third start-up incubators and accelerators on the continent and receive 80% of FDI for technology start-ups to Africa.
Interestingly, Nigeria, despite its location, stays the major direction of technological investments in Africa endemic corruption, high poverty rate AND poor economic performance.
This was highlighted by the announcement that recently retired tennis legend Serena Williams’ enterprise capital firm Serena VenturesIs support Nigerian data and insights company deleted in a $3.3 million seed round led by Mac enterprise capital. This means that Serena Ventures has established cooperation with institutional investors MaC Venture Capital, Melo 7 technology partners, Omidyar Group AND stunt invest $3.3 million in Stears.
What is the attraction?
The “The Big Four” countries attract more startup FDI than other African countries as a consequence of their large economies and sizeable populations.
For example, Nigeria with its GDP of roughly $440 billion AND the population is roughly 211 millionis expected to be the third largest country by population in world by 2050. Similarly, Egypt, Kenya AND South Africa boasts one of the largest economies in Africa, with a GDP of $404 billion, $110 billion and $420 billion respectively.
Investors are attracted by the large markets in these countries and the potential for technology corporations to expand into Africa.
Why Stears agreed to Serena’s nod
There are several the explanation why Stears is attractive as an investment. It has adult since 2017 at around 6.5% month-on-month and the variety of users has doubled over the last yr. Corporate clients, mainly employees working in various finance-related institutions across Nigeria, currently provide over 75% of their services incomein comparison with 45% in 2021
This makes it a rare success story for paid subscriptions in Nigeria, where consumers generally are reluctant to pay web sites for information.
Stears also positions itself as a collector and analyst of African data for international organizations. His customers include the European Investment Bank, the United Nations Development Program and the UK Foreign, Commonwealth and Development Office.
Stears uses his data and analytics skills to create interactive visualizations and created Nigeria First real-time election tracker for the 2019 general election cycle.
Business says plans to make use of the recent seed funding to expand its geographic reach through a presence in Eastern and Southern Africa and expand its product offering.
Corruption is still a problem
Due to corruption, Nigeria, unlike other oil producing countries similar to Norway and Qatarhe couldn’t use it growing world oil prices. It was The largest oil producer in Africa but this yr he lost that position to Angola.
The growing importance of Nigerian technology start-ups is in line with global realities. WITH threat of climate change AND potential transition away from fossil fuels, the Nigerian oil industry is prone to suffer.
While it is excellent news that Nigeria continues to draw investment in tech startups, urgent motion is needed to combat corruption. This will attract more investment to the country and help reduce poverty. Moreover, technology start-ups can help fight corruption and at the same time secure investments.
Our research emphasized the activity of such a case. BudgITis a Nigerian NGO that secured $400,000 from Omidyar Network in 2014. In 2016, he managed to boost one other USD 1.4 billion from Bill & Melinda Gates Foundation.
BudgIT delivers technology products that empower residents by providing access to often hidden budget data secrecy. Like Stears, she pioneered open and lively citizen engagement for transparency in the budgeting process in Nigeria.
Stears did something similar with his real-time election tracking tool. This technology product helped Stears increase its credibility in the technology industry. It also helped improve the transparency of Nigeria’s elections.
Such actions can help build accountability. This, in turn, will increase the confidence of foreign investors to take a position in African countries and highlight the value of such corporations.
It can be better
Technology corporations If sources of employment for thousands and thousands of individuals on the planet and their actions make a difference The nature of labor. Nigeria needs this sector to succeed, if only to assist with it problem of unemployment.
Political stability, lower production costs and good infrastructure (especially energy, communication and transport) could also be helpful in this regard. A liberal foreign direct investment policy that does not restrict investment and the free flow of capital would even be helpful.
Most importantly, Nigerian tech startups will attract more investment if Nigeria is less corrupt. Their actions can help each secure investments and reduce corruption in the country.