Nigeria shines as Africa’s startup funding jumps 240%

Nigeria is currently leading the way in Africa’s startup ecosystem, with a significant surge in funding. Reports indicate that African startups have experienced a 240% increase in funding, and Nigeria is at the forefront of this growth.

This sharp rise is a testament to Nigeria’s thriving entrepreneurial landscape and growing role as a major hub for technology and innovation in Africa. Nigerian startups, especially in sectors like Fintech, Agritech, and Healthtech, have attracted both local and international investors eager to tap into the continent’s growing digital economy.

However, in January 2024, African startups raised $85 million. However, this performance in January 2024 made it the second-best January for startup funding since at least 2019, falling behind only the January 2022 period during the peak of the funding boom, according to ‘Africa: The Big Deal,’ a funding tracker.

The surge in investment reflects increased confidence in the country’s business environment and its potential to produce high-growth companies. This wave of funding could lead to more job creation, innovation, and economic development, positioning Nigeria as a critical player in Africa’s startup scene.

The funding tracker noted, however, that equity financing dominated the fundraising landscape, accounting for over 90 percent of the total amount raised at $262 million, which is a leap from the figure in January 2024. It also marks the second-highest January for equity fundraising in the past six years.

The surge in startup funding in Nigeria is being driven by several key sectors, each offering unique opportunities and potential for growth which are:

1. Fintech (Financial Technology)

Fintech has been a major player in Nigeria’s startup ecosystem, attracting a significant chunk of investment. The sector’s growth is being fueled by the increasing adoption of digital payments, mobile banking, and online financial services.

• Notable Companies:
  • Flutterwave: A leading payments company that facilitates cross-border transactions for businesses in Africa. It raised significant funding in 2022 and has become one of the most valuable African startups.
  • Paystack: Acquired by Stripe, Paystack is another major player in the Nigerian fintech scene, providing payment solutions to businesses in Africa.
• Why it’s growing: Nigeria’s large unbanked population, the rise in mobile phone penetration, and the increasing need for digital payment solutions in the e-commerce sector are driving the fintech boom.

2. AgriTech (Agricultural Technology)

Nigeria’s vast agricultural sector has also seen a wave of tech-driven startups offering innovative solutions to improve food production, distribution, and efficiency.

• Notable Companies:
  • Farmcrowdy: One of Nigeria’s leading agritech platforms, connecting small-scale farmers with investors and providing access to technology that increases productivity.
  • Hello Tractor: A startup leveraging technology to help farmers access machinery and improve farm yields, helping bridge the gap between farmers and mechanized farming.
• Why it’s growing: Agriculture is a vital part of Nigeria’s economy, and tech innovations are enhancing the sector’s productivity, especially given the country’s large rural population and the growing need to ensure food security.

3. HealthTech (Healthcare Technology)

The healthtech sector is gaining momentum in Nigeria due to increasing demand for accessible healthcare solutions and the challenges posed by traditional healthcare systems.

• Notable Companies:
  • 54gene: A genomics company working to improve healthcare and research by advancing genomic medicine across Africa.
  • Helium Health: A platform providing electronic medical records and healthcare management solutions to hospitals across Nigeria.
• Why it’s growing: Nigeria’s healthcare system faces significant challenges, such as limited access, long wait times, and insufficient infrastructure. Healthtech startups are providing innovative solutions that bring healthcare to underserved areas and improve patient care.

4. E-commerce

The e-commerce sector in Nigeria continues to grow, driven by increasing internet penetration and mobile phone usage. Consumers are increasingly turning to online platforms for goods and services, opening up opportunities for e-commerce startups.

• Notable Companies:
  • Jumia: Often referred to as the “Amazon of Africa,” Jumia has become one of the largest e-commerce platforms in Nigeria, offering a range of products from electronics to fashion.
  • Konga: Another significant player in Nigeria’s e-commerce sector, Konga is competing with Jumia and continues to expand its offerings.
• Why it’s growing: The expanding middle class, growing internet access, and a young, tech-savvy population are major drivers for the e-commerce boom in Nigeria.

5. EdTech (Education Technology)

Edtech has been gaining traction in Nigeria, especially with the disruption caused by the COVID-19 pandemic. The demand for online learning platforms, skills development, and e-learning tools has risen sharply.

• Notable Companies:
  • uLesson: A popular Nigerian educational platform that offers video lessons, live classes, and digital learning resources to students in secondary and tertiary education.
  • Andela: A talent accelerator that trains software developers and connects them to global companies, helping bridge the skills gap in Nigeria’s tech industry.
• Why it’s growing: The need for quality education and the rise of digital learning platforms have made edtech an increasingly important sector in Nigeria, especially as more people seek remote and flexible learning solutions.

6. Logistics and Transport

Logistics startups are helping solve the challenges of transportation, particularly in a country with high demand for efficient delivery services.

• Notable Companies:
  • Lori Systems: A logistics platform that optimizes supply chain management, making freight delivery more efficient across the African continent.
  • Max.ng: A leading ride-hailing and delivery startup in Nigeria that focuses on motorcycle-based delivery services, catering to the urban transportation needs.
• Why it’s growing: With the country’s fast-growing population and urbanization, efficient logistics and delivery systems are essential for businesses and consumers alike.

Africa: The Big Deal noted that the four largest deals in January 2025 came from the big four (Nigeria, Kenya, Egypt, and South Africa), and they accounted for about 60 percent of the total funding raised across the continent.

Furthermore, the Big Deal said, “PowerGen, an energy-focused startup, raised $50m+ to establish a scalable platform for distributed renewable energy solutions across Africa, LemFi (Fintech) secured $53m to further expand into Asia and Europe.

Naked, an Insuretech firm, bagged a $38m Series B to automate and expand its product offering; and Enko Education secured $24m to keep expanding its network of African schools.

Furthermore, Davidson Oturu, general partner at Nubia Capital, noted that Nigerian startups have significant opportunities to position themselves better for funding in 2025.

He said, “The funding landscape for African startups is evolving, and 2025 will likely see a mix of challenges and opportunities. Foreign investors will remain significant players, but global economic pressures may lead them to be more cautious and selective. Startups will need to demonstrate strong fundamentals, scalability, and the ability to solve real problems to attract their attention.

The growth of startup funding in Nigeria is being driven by these sectors, which are solving real-world problems and tapping into Nigeria’s growing consumer base. Whether it’s Fintech making payments easier, Agritech boosting farming productivity, or Healthtech improving healthcare access, Nigerian startups are shaping the future of business on the continent.

Source: Businessday