A recent report by the policy and advisory research firm, Startup Genome, has highlighted Lagos as the frontrunner in the Sub-Saharan startup ecosystem in terms of both its overall value and the funding it has raised. For a similar post, read our comprehensive article on the Top Fintech companies in Nigeria.
According to the report’s findings, the Lagos startup ecosystem, which took into account exits and startup valuations from the second quarter of 2020 to 2022, has been valued at a remarkable $8.4 billion.
Following closely behind are Nairobi and Cape Town, with total startup valuations of $7 billion and $3 billion, respectively. In terms of early-stage funding, startups in Lagos raised an impressive $820 million, the highest figure in the region.
The report further indicates that Lagos proudly holds its place in the global emerging startup ecosystem ranking, securing a position between 51 and 60.
Regarding funding specifics, the report highlights significant deals like OPay‘s $400 million Series C in August 2021, the largest in the region, and Flutterwave’s $250 million Series D in February 2022, which drove its valuation to over $3 billion.
Venture Capital (VC) funding in the region experienced a slight 6% decline from 2021 to 2022. Remarkably, Fintech emerged as the top-performing technology sector, accounting for 41% of total startup deals between 2018 and 2022, with Nairobi positioned as the region’s prominent fintech hub.
As the report explores the startup landscape in Nigeria, Lagos stands tall as the dominating tech sector, boasting an impressive 88% of tech startups, totalling over 400 in number.
Fintechs are the driving force behind Lagos’ tech ecosystem, constituting 49% of the city’s tech companies. Meanwhile, Property Tech (Proptech) and Educational Tech (Edtech) are also making noteworthy strides in the broader Nigerian tech industry.
It’s worth noting that in October 2022, former President Buhari signed the Startup Act into law, establishing a regulatory framework encompassing finance, intellectual property, and other vital aspects for startups across the country. This move grants startups a four-year income tax exemption, along with an additional 5% tax relief on taxable profits for up to five years for qualifying startups.
In light of such initiatives and the Lagos State KITE program, it comes as no surprise that Lagos remains firmly in its position as the dominant tech hub in Nigeria, leaving a lasting impact on the continent’s thriving tech ecosystem.