Although the Nigerian startup ecosystem has been on a commendable acceleration, more efforts and consistency needs to be inputted to enable the country gain solid global competitiveness.
Analysing the growth rate of startups across 1,000 cities and 100 countries, the StartupBlink Global Startup Ecosystem 2022 was recently released in partnership with data sources like Crunchbase, SEMrush, Statista, as well as Meetup, and also working with approximately 100 Ecosystem partners, most of which are government agencies.
Basing its algorithm on objective, quantifiable data that can be comparatively measured across regions, countries, and cities, StartupBlink focused on startups leveraging technology to build scalable innovative solutions.
With several countries dropping or rising in rank compared to previous years, countries like the United States, United Kingdom, Israel and Canada remained the first four respectively from 2020 till now.
In Africa, the only country among the top 50 had a decline by one spot compared to last year. This was South Africa which came up as 49th in the ranking. Some other African countries among the top 100 were Kenya; ranked 62 and Ghana; ranked 82, both declining by one spot, Egypt went five spots higher than last year, ranking 65 and Senegal increased 13 spots to rank 92.
Following South Africa was Nigeria, ranking 61 and climbing the ladder by two spots compared to last year. The country is the highest-ranking country in West Africa, 2nd highest in Africa and 4th in the Middle East and Africa region where Israel, United Arab Emirates and South Africa ranked 1st, 2nd and 3rd respectively. This increase was a result of the tremendous startup growth in one of the country’s cities — Lagos State.
The StartupBlink report described this as “one of the most celebrated and interesting jumps”. For the first time, Lagos is the first African city to ever reach the global top 100; it climbed 41 spots to rank 81.
“Lagos was ranked 24th globally in the Foodtech industry and 43rd in eCommerce & Retail. Lagos’ achievement in Foodtech should be celebrated because Lagos is the only African city to reach the global top 30 for any of the 11 industries,” the report stated.
Although ranked as the 2nd in Nigeria, Abuja decreased by 7 spots to rank 473rd among the 1,000 cities and Ibadan lost 308 spots to rank 661st.
“Several other Nigerian seed ecosystems dropped out of the rankings this year. Consequently, the total number of Nigerian cities in the global top 1,000 fell from 7 to 3, signaling some cities with seed ecosystems are losing momentum even as Lagos witnesses very high growth, and suggesting that Nigerian talent may be moving to Lagos at the expense of other cities. South Africa has displaced Nigeria as the country in Africa with the highest number of ranked cities in the top 1000.”
Giving its recommendation for Nigeria to do better, the report emphasized that policymakers in Nigeria need to strengthen other ecosystems, given the size of the country, and push one more ecosystem towards the top 200. The government has to do its part in addressing the infrastructure deficit so that talented entrepreneurs can achieve success faster.
Ecosystem Funding by Region
Over half of the global startup funding is received by North American startups — 52.3%. This is followed by startups in the Asia Pacific — 24.0%, Europe — 18.3%, Latin America & the Caribbean — 2.9%, as well as the Middle East & Africa — 2.5%.
The report further noted that 69% of the funding in the Middle East & Africa goes to Israeli startups, similar to the Asia Pacific region where most of the funding goes to startups in China. These are the strong players in both regions while startups in other countries receive substantially less funding.