Nigeria’s startup ecosystem plays a vital role in the country’s economic development and employment creation. Yet, it is a hub for entrepreneurial building and innovation in need of collaboration, incentives, and an enabling environment to develop, ADEYEMI ADEPETUN reports.
NIGERIA’s startup ecosystem ranks 64th globally and it is a leader in West Africa, according to the 2023 Global Startup Ecosystem Index. With a young, tech-savvy population, the country has huge potential to build sustainable growth.
Creating an enabling environment for startups in Nigeria is crucial as it forms the backbone that supports innovation, growth and resilience. The environment, composed of mentors, financial institutions, government support and tech development partners, is pivotal in fostering a thriving startup ecosystem.
Startups in Nigeria are seen as engines of innovation, driving economic growth and job creation. However, the journey from idea to impact is rarely achieved without the support of a strong ecosystem. A well-established network of entrepreneurs, investors, educational institutions, policymakers and corporations is essential for providing access to resources, knowledge and capital.
According to the Nigerian Startup Ecosystem Report 2022, over 480 technology startups are operational in the country, employing more than 19,000 people and raising over $2 billion in funding between 2015 and 2022.
African funding analytics company, Africa the Big Deal, disclosed that as of the first half of 2024, African tech startups raised $780 million. Though the figure was lower compared to the same period in 2023, with Kenya being the choicest destination for funding as it accounted for $244 million of the total sum, which represented a 32 per cent share, Nigeria came second with $172 million – representing 23 per cent of the total.
The statistics are just a glimpse of the ecosystem’s potential, which can be unlocked with the right support structures in place.
Industry analysts posited that mentorship is key within the ecosystem. In Nigeria, experienced mentors help entrepreneurs refine ideas, build business models and navigate challenges. Incubators and accelerators are essential in connecting startups with industry experts who provide guidance, expand networks and foster leadership skills. This support is crucial, particularly for early-stage startups, where strategic decisions can determine the success or failure of a venture.
According to them, technology access is another critical factor in startup success, particularly in resource-constrained settings. They noted that tech development partners, like Microsoft for Startups Founders Hub, bridge this gap by offering essential tools and resources. Nigerian entrepreneurs gain free access to AI models like AzureAI, $150,000 in Azure credits and platforms such as GitHub and Microsoft 365. These resources enable faster innovation, cost reduction and enhanced global competitiveness, demonstrating the vital role of tech partnerships in fuelling ecosystem growth.
Checks showed that this technological support is already transforming sectors across Nigeria. For example, The Guardian gathered that ICE Commercial Power uses AI to optimise clean energy distribution in underserved regions. Trucki provides AI-driven telematics and logistics solutions to cargo owners and manufacturers, while Orange VFX is integrating AI into its production workflow to enhance efficiency and boost creativity.
Other startups, such as Wallx, CoTrust Equity and Aibanc are leveraging AI to improve access to finance, enhance banking efficiency, and secure transactions. The FAST Accelerator program, a partnership between Microsoft and Flapmax, is enabling these startups to scale rapidly through advancements in AI and skills development, contributing significantly to the growth of Africa’s broader startup ecosystem.
Country Manager, Microsoft Nigeria, Olatomiwa Williams, said: “True leadership in tech is about more than innovation—it’s about empowering teams, shaping future-ready solutions, and fostering ecosystems that drive collective growth. The challenge is not just building the next big thing, but creating an environment where others can thrive and transform the world alongside you.”
Indeed, talent development is essential for fueling innovation and sustaining growth within startups. Nigeria’s ecosystem is addressing this need through collaborations with educational institutions, government programmes, and private sector initiatives that foster expertise in emerging technologies like AI and data science. These efforts not only empower individual startups but also contribute to the nation’s digital economy.
Be that as it may, the country’s startup ecosystem still needs more collaboration to further weather the storm. A report by TLP Advisory, which highlighted the state of Nigeria’s tech-driven innovation landscape and offers actionable recommendations for building a resilient ecosystem, Nigerian startups are currently navigating significant hurdles, from funding constraints to talent shortage, amidst regulatory complexities.
The report, titled, ‘A Decade of the Nigerian Venture Ecosystem: Numbers, Insights and Stories’ noted that while 2021 marked a high point for Nigerian startups with $3 billion in venture capital investments, 51 percent of startups surveyed have been facing difficulties in securing funding due to currency devaluation and limited investor access.
As earlier stated, the report recommended strengthening the ecosystem, which includes deepening strategic partnerships, investing in talent development, engaging in policy development and. It noted that there was a need for active participation in policy discussions to create a supportive regulatory environment for startups.
The report submitted that there was a need for more effective collaboration between policymakers and the startup ecosystem, particularly under the Nigeria Startup Act, which provides a legal framework to support innovation-driven enterprises.
Nigeria’s startup ecosystem continues to expand, supported by diverse funding channels, government initiatives and a thriving collaborative environment. With strategic investments in mentorship, technology, talent and policies, Nigeria’s startups are positioned to drive Africa’s tech revolution and emerge as global leaders in innovation.
