The first 3 months of year 2021 has proven fruitful for startups in Nigeria, particularly those in the Financial Technology Industry otherwise known as Fintech as they surpassed the total money raised in the whole of 2020!.
2020 started on a high note with a total of $55.37 million raised in Q1 (Fintech raising 88.2%) only to be blindsided by the outbreak of the COVID-19 pandemic, consequent lockdowns and economic meltdown across the world causing a drop in funds raised in Q2 to $28.35 million (Fintech contributing only 8.45%) according to Techpoint Africa quarterly reports
Fear and anxiety left many investors scampering for safety with their funds put on ice until some certainty could be restored, which saw a decrease in funds raised over Q2 and Q3 but as global economies started to recover and the businesses reopen, investors started to reopen their purses and continue splashing the cash again which led to an increase in funding for the last quarter of 2020.
However, there has been significant improvement in the first quarter of 2021 indicating investors are still willing to write big cheques and also confirms that they still believe in the potential of the Nigerian tech industry. The return on investments (ROI) on venture capitalists in the country has further strengthened the belief that Nigeria does have the talents and solutions to tackle problems and other developmental challenges in Africa evident by the Acquisition of paystack by Stripe, Flutterwave’s recent funding and many other landmarks.
$256.34 million was raised by a total of 16 Nigerian startups during the months of January to March (only publicly disclosed deals were computed in this data). Fintech still proved the favourite destination for investors in Nigeria as it accounted for $202.15 million (78.94%) of total funds raised.
Q1 funding summary by industries
Fintech – 78.86%
Energy – 14.82
Edtech – 2.93%
Cleantech – 1.79%
Logistics – 0.66%
Communication – 0.55%
Others – 0.38%
Key moments in Q1
- Flutterwave closed a $170 million series C round, the largest amount ever secured by an African tech startup and becomes a Unicorn (valued at over $1 billion)
- Kuda raised $25 million in a series A round, bringing its total funds raised to $36.6 million
- Paypal partners with Flutterwave to make it easier for African businesses to accept and make payments worldwide
- Mono, Blueloop, Prospa, Vendease, Sendbox and 5 other african startups got accepted into the YCombinator 2021 batch
- TalentQL, Plentywaka joins other african startups in the Techstars accelerator for 2021
- Nigerian EdTech giant ULesson secures $7.5 million in Series A funding
With over $250 million generated in Q1 alone, 2021 could be the year where Nigerian startups raise over a billion dollars if things continue moving at this positive trajectory, putting Nigeria firmly in the driving seat of countries on the continent that are leading funding activities, a position that it lost to Kenya in the previous year.