My Excitement With the Nigerian Tech Space
On a random Whatsapp discussion with a much senior friend here who loves to invest, he asked this very interesting question,
“How do we identify these young kids in the Yaba startup ecosystem and invest before they become unicorns?”
He was referring to a post I resurrected which was made some years back about someone promising in the tech ecosystem, and some others I mentioned in passing in a few of our discussions.
My answer wasn’t outlandish and unorthodox. I gave a simple answer. I said,
“You have to be in their community. They introduce their ideas in these communities.”
If you have followed me here for a while, you already know that I am a fan of technology. Earlier today, I mentioned that the two industries that have reached self-sufficiency in Nigeria are the Music and Movie industries. I greatly attribute that to the fact that the government does not know what to do with them. They have become world-renowned because the government has not sought to put their hands in their cookie jar. The government has not even tried to ‘help’ them by banning foreign music or movies like they do in other industries. Young men and women — regardless of education or background — get into these industries, get serious, get lucky, and get rich. They go shoulder to shoulder with the rest of the world and soar. Geralt keeps sharing his testimonies with me and I am amazed at the progress of the skit industry.
The technology, especially the fintech space is much the same. The barrier is low. Anyone can participate — whether you know or want to learn to code or not. Anyone can create a website. For those in fintech, anyone can decide today to get to do business with one of the 79 million account holders in Nigeria. If that is not your cup of tea, you can go in search of the 40 million unbanked Nigerians.
And that’s exactly what young Nigerians are doing — not waiting around for permissions.
I don’t know what the numbers are for November, but a Tech Cabal report in October said that in September 2021, startups in Africa raised $800 million. More striking is that the funding in September and August alone surpassed the amount raised in the whole of 2019. You can read that again.
Since the beginning of the year, startups in Africa have raised more than $2.9 billion through over 500 deals — each one worth at least $100,000 — with about 200 of these deals being worth over $1 million.
Now for the moment when I always smile: A bulk of this funding comes to Nigeria. Startups in this country have raised $1.27 billion as of October this year, representing 44% of the total funding raised in Africa.
This is great news for the young aspiring Nigerian as well as the Nigerian investor.
For the young aspiring Nigerian, this is no greater motivation. She sees Stripe’s acquisition of Paystack for $200 million, Cheki’s acquisition by Autochek, NGcareers acquisition by Jobberman, etc and she dreams. Iniobong’s EdTech company is going live soon and her excitement is palpable.
For the Nigerian astute investor, he starts seeing that it is unwise to keep ignoring these tattoo-donning braid-wearing kids always moving around with their laptops in shirts and jeans. He knows he has to start paying attention.
Both groups — talented youths and adult investors — need to be close to the community. That’s why I love the DevOps group we have created so much. Being close to the community means being let into conversations happening in the ecosystem. For instance, I told Mercy that I have to attend a session Abiodun Animashaun is having on Friday. I told her that I’m attending because he is going to be speaking frankly about the Nigerian fintech ecosystem. Why is he qualified to speak on it? Because he is the country director of Chipper Cash Nigeria. Chipper Cash is a fintech company and has just last week raised $150 million to become the latest unicorn in Africa. A unicorn is a startup that is worth at least $1 billion. (Here is the LINK for those interested).
These conversations are important because very few people can dream beyond what they see. Convictions come by seeing people do stuff; seeing people do these stuff repeatedly.
You cannot participate effectively in things you do not understand. You cannot understand these things unless you intentionally become part of the community and listen in on the conversations.
What is happening in the tech ecosystem excites me. And hearing the conversations happening as well as participating in the community thrills me enough to get my keyboard dancing on my system’s Notepad.