X-raying the Success Stories of the Nigerian ICT Ecosystem in 2022

2022 is undoubtedly an unforgettable year for the tech ecosystem in nearly every region of the globe. A whole lot has happened: from more funding to acquisition deals and, of course, massive layoffs. The Nigerian tech ecosystem, expectedly, had its fair share of these events.

Despite many gbas gbos that defined 2022, the Nigerian tech ecosystem unsurprisingly fared pretty well. Like we did in previous years, this piece will take you through the biggest wins the Nigerian tech space scored in the year under review.

Funding: More funding

Over the years, Nigerian startups have seen increasing funding. The reason isn’t far-fetched. Nigeria prides itself as the most attractive tech startup investment destination in Africa. Between 2015 and 2022, 383 tech startups raised over $2 billion, according to the Nigerian Startup Ecosystem Report 2022, released by startup-focused content and research company Disrupt Africa.

In terms of investments this year, Nigerian startups closed more funding rounds than any other African country. For context, 28 Nigerian startups raised their first $1m+ round in the first half of 2022, according to Africa: The Big Deal, a newsletter that tracks fundraising in the continent.

According to a report by Renaissance Capital on the African tech and fintech industry, Nigerian startups raised $678 million in 107 different deals between January and April this year, accounting for 31% of the total funds raised by African tech companies in the four months, which stood at $2.2 billion.

This year’s biggest round of funding in Africa was the Series D round of $250 million raised by Nigerian unicorn Flutterwave in February. The round led by B Capital Group, a US private equity firm, reaffirmed Flutterwave as a valuable top-level company. Some of the world’s most prestigious investors, including Altak Park Capital, Whake Rock Capital, and Lux Capital, amongst others, were the latest supporters in the funding round.

In May, Interswitch, one of Africa’s largest fintech companies, secured a $110 million deal in a joint venture deal with LeapFrog Investments and Tana Africa Capital to increase its presence across Africa with its digital payment services.

In August, Nigerian fintech startup TeamApt raised $50M in a “pre-Series C round”. The amount represented 13.6% of the company’s total funding. Per the CB Insights State of Venture Q3’22 Report, this is the highest amount raised by an African startup in the third quarter of 2022.

Per data from Africa: The Big Deal, the second half of 2022 has been quieter for the Nigerian tech ecosystem. For instance, in November, only $16m of funding was announced, the lowest monthly number since June 2021.

However, Nigeria still leads the pack compared to the other ‘Big Four’, having raised almost $1.2 billion as of December 1. So the ecosystem would have to raise $534m in December to top its 2021 performance of $1.5 billion. But all pointers show that Nigeria will record a YoY funding decline in 2022.

Massive acquisition deals

This year also recorded some notable acquisition deals involving Nigerian startups.

In February, Equinix Inc, the world’s digital infrastructure company, acquired West African data centre and connectivity solution provider, MainOne for $320 million. The deal was in line with Equinix’s long-term strategic plan to become a leading African carrier-neutral digital infrastructure company, providing services to Nigeria, Cote d’Ivoire, and Ghana.

In July, Autochek, the Nigerian pan-African automotive technology company, acquired CoinAfrique, a classified marketplace in francophone African countries, for an undisclosed amount. This came over a month since the company announced the acquisition of Moroccan automotive tech startup KIFAL autos.

In September, mPharma acquired a majority stake in Nigeria’s leading pharmacy brand, HealthPlus. Though he didn’t disclose details about the deal’s worth, mPharma’s CEO and Co-founder, Gregory Rockson, noted that the acquisition complements the company’s deep commitment to increasing patient access to affordable and quality healthcare in Nigeria.

Last month, Nigerian credit-led SME fintech startup, Payhippo acquired Maritime Microfinance Bank (MFB). A microfinance bank that offers some banking products, demand deposits, investments, and micro and SME loans.

Flutterwave got CBN’s switching license

In September, Flutterwave acquired a Switching and Processing License from the Central Bank of Nigeria (CBN). The Switching and Processing license will enable Flutterwave to process financial transactions for other fintech companies and financial institutions and issue customer payment cards without relying on any other intermediary.

The license is regarded across the industry as CBN’s most valuable license for any fintech company to acquire. Before this, Flutterwave operated with the Payment Solution Service Provider (PSSP) and International Money Transfer Operator (IMTO) license.

In October, the company announced $endmobile, an app to facilitate the faster and easier transfer of funds from the diaspora to the African continent, with Tobi Amusan, the Nigerian 100m Hurdles Women’s World Record Holder, as $endmobile’s ambassador.

The Nigerian Startup Bill was passed into law

In October, the Nigeria Startup Bill (NSB), the messiah legislation many players in the tech ecosystem have billed as the long-awaited reform that the space needs, became the law of the land after securing assent from President Muhammadu Buhari.

The bill offers tax breaks for startups and their employees, a path to dialogue with government officials, and the Startup Investment Seed Fund for young Nigerian entrepreneurs.

Nigeria joined Tunisia and Senegal on the list of African countries to have passed dedicated legislation geared at enabling startups.

For one, the legislation is the brainchild of the collaboration between startup investors, entrepreneurs, law firms, policy advocacy groups, and federal government representatives. But in a tweet, President Buhari claimed his administration developed the bill.

In an interview with The Punch, Oswald Guobadia, the Senior Special Assistant to the President on Digital Transformation, called the approach to draft the bill the ‘Big Tent Approach’, adding that an amendment is imminent for success to be truly realized.

2023 should be better

Next February, Nigerians will head to the polls to elect a new president. The major contenders for the nation’s top job have all unveiled their policy documents which, of course, capture their plans for the tech ecosystem.

Nigeria remains the primary home of the startups on the continent, so the ecosystem holds a lot of promise. Being the year that will usher in a new leadership with fresh plans, 2023 sure will bring bigger wins for the Nigerian tech space.

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