From January to March (Q1) of 2024, the African tech sector received a total funding (equity, debts, and grants) of $466 million. 35% of which went to startups in Nigeria. Moove, a Transport Tech startup, accounts for two-thirds of this sum.

Across the years, we have seen the Nigerian tech industry grow to receive national and global attention from funding to innovations and increased market shares. In 2022, a report by TechCabal showed technology now contributes more than oil to Nigeria’s Gross Domestic Product (GDP). According to recent data from the National Bureau of Statistics, this still remains a fact. The tech sector contributed 16.66% to GDP in Q4 of 2023 compared to oil’s 4.70% in the same quarter.

Nigerian Startups that Raised Funding in Q1 2024

Following are the Nigerian startups that announced any form of funding in each month of the first quarter of 2024, details about their startups, and the type of funding raised. This information has been sourced from TechCrunch, Benjamin Dada, and TechCabal.

January:

The year began quite slowly, with only one funding raise announced.

• Cleva, founded only last year, is a fintech company aimed at becoming a key player in the international payments space. Cleva raised $1.5 million in a pre-seed round led by 1984 Ventures, an early-stage venture firm.

February

In this month, the ecosystem saw two startups receive funding, including Moove which garnered the highest investment of any startup on the continent in this quarter.

• Klas, an EdTech startup, secured a $1 million pre-seed raise to expand its operations across Africa, India, and North America. This funding round was led by Ingressive Capital.
• Moove: This mobility tech startup received two rounds of funding in March to expand its offerings to new cities in India, where it also operates outside of Nigeria and parts of Sub-Saharan Africa. They secured $10 million in debt financing from Stride Ventures and $100 million in equity funds led by Uber, bringing the startup’s valuation closer to unicorn status at $750 million.

March:

• MDaaS: In a pre-Series A funding round led by Aruwa Capital and Newton Partners, this health tech company raised $3 million, part of which it will use to expand its healthcare offerings to all 36 states in Nigeria.
• Zone, the blockchain fintech formerly known as Appzone Group, a fintech software company, raised $8.5 million in a seed round to expand operations across the country and onboard more banks and financial services worldwide.

What This Means for Future Rounds in the Industry

The Nigerian tech ecosystem received a total of $160 million in Q1 of 2024, representing the bulk of funding investments on the continent and an increase from Q1 2023’s total funding of $42.6 million. This is an even more impressive feat considering the global decline of funding to tech startups over the past few years. Typically, fintech dominates the country’s funding rounds with the highest numbers.  This is no surprise, as fintech adoption increased from 28.82 million people in 2017 to approximately 90.92 million in 2022 and is expected to reach 146.10 million by 2027.

That was not the case this quarter and the last two quarters (Q3 and Q4) of 2023. From the funding news collated, eight Nigerian startups secured funding in Q3 of 2023 and three startups in Q4. Of these eleven total startups, three are in mobility tech, two in health tech, two in fintech, two in infrastructure/platform tech, one in crypto tech, and one in online grocery retail/e-commerce. When you compare this with 2024’s raises so far—two fintechs, one EdTech, one health tech, and one mobility company - it seems funding interests are shifting to other sub-sectors of the industry like mobility and health.

For founders looking to build tech solutions, these areas can be explored to discover and understand existing problems and market size. In health tech, the FemTech sub-sector is a promising area with many gaps. It has been projected to be a big market with growth and venture-backable models and opportunities across the continent.

Trends from the last three quarters also reveal that the majority of investments focus on companies in the seed round expanding operations or services across regions. Following the global decline of investments, one could assume investors are putting more money into companies that have proven themselves or secured a market share and are willing to expand rather than new ideas or startups.

From this, it can be inferred that this may be a good time for established Nigerian companies looking to pivot into building global tech-enabled products/solutions, as well as non-fintech startups with good numbers to seek and attract funding.

References

The Big Deal: “Q1 2024 in a nutshell”. [https://thebigdeal.substack.com/p/q12024].

TechCabal: “Technology now contributes more than oil to Nigeria’s GDP”. [https://techcabal.com/2022/09/01/tech-drives-nigeria-gdp/].

National Bureau of Statistics: “Nigerian Gross Domestic Product Q4 2023”. [https://nigerianstat.gov.ng/download/1241460#:~:text=The%20Oil%20sector%20contributed%204.70,4.34%25%20and%205.48%25%20respectively.&text=The%20non%2Doil%20sector%20grew,reference%20quarter%20(Q4%202023).]

BD Funding Tracker 2023: “African Startups Funding Tracker 2023”. [https://www.benjamindada.com/funding-tracker-2023/].

TechCrunch: “The latest startup and technology news coming out of Nigeria”. [https://techcrunch.com/region/africa/nigeria/].

Benjamin Dada: “Fundings”. [https://www.benjamindada.com/tag/funding/].

TechCabal: “The State of Tech in Africa Q1 2024”. [https://scontent.fabb1-2.fna.fbcdn.net/m1/v/t0.50684-6/An-2ClbTWhmSO5ldaf2jJNtSjA5gXrQC5on2exrVqKVRVN621eQ7uyIv3llr9TZT0EjdnHBzafxalLScGS2CrnN-AyuhwZF3FydBLWqoJY9U_grNVp5V9xKdMTb0gw?ccb=10-5&oh=00_AYAmNHz3MFq2ptAj9Uu7QPO7p6_h3KJpK9eZhZ4_0qcWxA&oe=666648B8&_nc_sid=de6fe6].

Veriv Africa: “Women’s Health Tech: An Untapped Market in Africa”. [https://www.verivafrica.com/articles/insights/womens-health-tech-an-untapped-market-in-africa].

Marge Ntambi and Ona Aliakai: “Examining Venture Backable FemTech Models in Africa”. [https://sati.beehiiv.com/p/examining-venture-backable-femtech-models-in-africa].