51% of Nigerian startups struggle to secure funding — Report

A new report by TLP Advisory, a Nigerian venture law firm, has revealed that 51 per cent of startups in Nigeria face difficulties securing funding, primarily due to currency volatility and limited access to investors.

The report, titled “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,” launched on Tuesday, provided a comprehensive analysis of the Nigerian startup landscape over the past ten years. It highlighted both the growth and challenges that have defined the ecosystem, particularly as the country grapples with economic instability.

Key findings from the report include a stark picture of the difficulties faced by Nigerian startups. While 2021 saw a record $3bn in venture capital investments, over half of the startups surveyed indicated that securing funding remains a major challenge.

“51 per cent of startups surveyed reported difficulties in securing funding, largely due to currency volatility and limited access to investors. Angel investors have proven essential during this period,” the survey noted.

TLP Advisory, which has worked on some of the continent’s largest deals in the technology sector, also identified regulatory hurdles and talent retention as major challenges for Nigerian startups.

The report called for deeper collaboration between startups and corporations, increased investment in talent development, and greater engagement with policymakers to create a more supportive business environment.

The document also acknowledged key figures in the ecosystem, including early investors like Olumide Soyombo’s Leadpath, as well as enablers such as CcHUB and Lagos Angel Network, who have been instrumental in the growth of Nigeria’s venture ecosystem.

The co-founder of TLP Advisory, Odunoluwa Longe, commented, “Despite the current tough macroeconomic climate, engaging with participants in this project has reignited in me renewed hope and optimism for our ecosystem.

“We embarked on this project as our way of celebrating the ecosystem that made us, and this report reflects both the resilience and the evolution of the Nigerian tech ecosystem. It’s not just about technology; it’s about building a future where founders, investors, and the public sector work together to make Nigeria a leader in innovation and digital solutions.

“Over the past decade, we’ve witnessed, and have been part of, incredible success stories born from collaboration and adaptability, and we believe the best is yet to come.”

The Executive Director of FATE Foundation, Adenike Adeyemi, stated, “The most unexpected challenge for entrepreneurs in Nigeria has been the unstable and inconsistent regulatory and business environment.

“Founders here often have to navigate unique complexities, and a supportive policy framework is essential for unlocking their full potential.”

Speaking to the need for proactive policy engagement, the Founder of Ventures Platform, Kola Aina, noted, “The ecosystem must become more deliberate and take the job of engaging in government policy design more seriously, ensuring we shape the policies that govern our industry.”