How Nigeria Became The Hottest Startup Location

Unicorns are no longer elusive to the African continent, as evident by the three privately owned startups valued at over $1 billion, and the number of companies with the potential of turning into unicorns in the future.

Jumia, formerly known as Africa Internet Group (AIG), became the first African unicorn in 2016. The company came into being when its founders, Tunde Kehinde, and Raphael Afaedor, recognized the need for an online retail market in Nigeria. They raised funds from investors such as Rocket Internet, JP Morgan and Summit Partners, who had long realized Africa’s rising potential.

A consumer base dominated by an emerging middle class coupled with the lack of legacy competition paved Jumia’s path to becoming the first digital unicorn. Jumia is a pioneer not only in the sense of becoming a billion-dollar enterprise but also in establishing an exclusive business with little competition. In a similar way, startups like Konga, Gloo.ng and MoWoza bank on the emerging e-commerce industry and launched successful online retail powerhouses.

The African tech landscape has been progressing since the emergence of digital literacy in the continent. The digital emergence of Africa is dominated by numerous success stories of startups like Njorku, Dropifi, Adsbrook, Iroko Partners, Bozza, Fawry, Liquid telecom, Safaricom, Andela, BCX, PitPesa, Zipline, and Get Smarter to name a few. While companies like Jumia, Konga, Ushahidi and Iroko Partners have successfully built their way out of the startup phase, new upcoming startups with vast potential are on their way;

VConnect: Nigeria’s largest local search engine and online directory provides information about products, services, and SMEs across the country. It maintains a database of over 700,000 businesses and has over a million unique site visitors each month.

Flutterwave: Flutterwave provides enterprises, entrepreneurs, and banks with a platform that allows them to make and accept payments anywhere across Africa. Its unique and secure APIs makes digital payments simple for merchants. It also provides virtual wallets which can be used by local consumers to pay for their goods and services in their local currency.

Sliide Airtime: This innovative Nigeria-based startup provides its users with personalized content, including handpicked entertainment and news from local as well as international media sources. It has also expanded itself into a mobile advertising and delivery platform, which allows users to access content while also earning free airtime.

Nigeria has become the most recent country to launch Free Basics while listing 80 pre-selected free-to-browse websites with Airtel Africa, the country’s second largest mobile service provider. Not just limited to the provision of free internet, Facebook’s vision of a connected Africa also includes the development of an active community of developers through Facebook’s Developer Circle (DC). The DC identifies developers who have a flair for coding and technology, and wish to volunteer and towards a greater good.

While Africa has realized the bandwidth of what can be achieved through mobile internet, innovation can drive changes in other sectors which are less-dependent on mobile phones as well. Education, agriculture, and healthcare are the three major sectors in Africa that hold excellent market potential. Agriculture drives a significant portion of the African economy, and innovations in agri-tech and food-tech can further drive yields and increased profits. While access to health and education is still a challenge in rural areas, edtech and health-tech can address those issues through technological innovation.

As internet adoption has started to compensate for the absence of local infrastructure, cross-border expansion of the e-commerce market is increasing rapidly. The growing connectivity across the continent gives e-commerce merchants a unique opportunity to dominate this mostly untapped market. As more and more brands realize the importance of building their online presence through advertising, more people are opening up to the idea of earning their living online.

The evolution of social media has allowed African citizens to become more aware of the options available to them. In the face of competition, companies have to raise awareness about their brand and products. As part of their online marketing strategies, companies come up with affiliate programs in which compensation is given to online bloggers and influencers in return for the product awareness generated by them.

Nigeria’s digital development is defined by the government’s investment in technology and significant improvements in the ICT infrastructure. Half of Nigeria’s 182 million people are under the age of 30, thus contributing to the growing youth population. This new generation promotes an innovative entrepreneurial spirit, as evident by the excitement towards technology and software development in cities like Ibadan and Lagos.

In this booming digital economy, developers and young entrepreneurs across the country are busy creating innovative project ideas that help the community. For instance, Ire Aderinokun, a Nigeria-based front-end developer and UI-designer builds and contributes to tools that make common web applications compatible and accessible across a variety of web browsers and devices. Many young people like Aderinokun are also seeking support from developer community conferences, meetups, and tech hubs to further build on their existing skillset.

The growth of the Nigerian technology sector has been paved by the increasing number of startups across a variety of industries. Young entrepreneurs have worked on creating products and services that directly address the challenges faced by their country’s evolving infrastructure. For example, a number of fintech ventures have already streamlined banking, money transfers, and payments to enable more Nigerians to take advantage of the country’s growing banking system.

As of 2018, Nigeria has 55 active tech hubs, and many successful startup ventures like Paga, Flutterwave, and Paystack. These startups are also attracting investments from foreign investors. For instance, Andela, the startup that trains African developers for engineering jobs raised $24 million from the Chan-Zuckerberg Initiative, making it Facebook’s first investment.

These increased investments and partnerships are empowering Nigeria’s tech communities to transform the country’s economy, and even make a measurable impact across its borders. This has further been amplified by the government’s support and implementation of tech-friendly policies.

A small portion of the African continent at large, Nigeria is the perfect example of how technology can create opportunities for the community and how investments and policies can promote a flourishing technology ecosystem.