It’s no accident that in the last year, TechCrunch has covered more African companies than at any other time in our history. Many of those firms are Nigerian, and we can understand why when we look at venture funding statistics. According to Partech, a pan-African VC business that also tracks investments, the nation had a fantastic 2021 as the most active venture capital scene in Africa, raising more over $1.8 billion, or 34% of the $5 billion raised throughout the continent. In the previous three years, the country has steadily improved its position as Africa’s biggest startup market. Nigerian entrepreneurs received $747 million in venture capital funding in 2019, accounting for 37% of Africa’s total VC funding.
The following year, those figures dropped to $307 million, or 21% of the continent’s total, despite the fact that 2020 was a venture capital year heavily influenced by outside forces. Nigeria became the first African country to reach the billion-dollar milestone on its own last year, thanks in part to a worldwide surge in venture capital activity, while also earning bragging rights as the favored destination for mega-investors such as Tiger Global and SoftBank.
Y Combinator is taking notice. Despite doubts about investors’ due diligence and the eyebrow-raising values of some of the country’s businesses, the abundant optimism and conviction that brighter days are ahead in Nigeria’s tech sector is predictable.
No seed-stage firm in the country is more reasonably priced than those in the Y Combinator club. The accelerator graduated its inaugural startup cohort with its freshly modified terms yesterday. Y Combinator’s new “basic deal” now includes more funding, and pricing for Y Combinator grads are said to be higher than before. (It’s worth noting that just 10% of the current Y Combinator class generated monthly sales of greater over $50,000 when they were admitted.)
Apart from income ceilings, the accelerator highlighted another surprising Nigerian statistic. It is the first African country to have the third-largest startup representation when classed by country, with 18 businesses. Yes, this is a watershed moment for Nigeria, but it also demonstrates how swiftly the African startup sector has evolved in a short period of time.
