Venture capital into African tech started to decline after 2022, forcing founders to ask if it was better to sell to consumers who can’t spend, or sell tools to the businesses that still can.

The economics of a difficult choice

I used to think consumer-first was the fast lane, but not anymore. Today, more costs of customer-acquisition, shrinking disposable incomes and selective VC chequebooks mean the logic of “growth at all costs” is a gift very few Nigerian founders can afford.

Recent industry reviews show venture capital flows into African tech softened over the years, with total African tech VC around $2.2 billion in 2024, a pullback in deals and more picky investing. Funders are backing fewer startups and favouring those with clear unit economics. 

So founders face a practical choice to keep focusing on individual consumer startups, and highly expensive attention, or pivot to B2B, embedded finance and infrastructure, where unit economics are clearer and customers (businesses) have repeatable budgets.

The B2C problem: why many consumer startups are burning out

Consumer startups in Nigeria are facing three structural challenges at once:

1. Higher customer-acquisition costs (CAC). Because everyone’s vying for clicks and impressions, the cost of customer acquisition has ballooned. Digital ad marketplaces are commoditised and pricey; getting someone’s first purchase now costs far more than it did in 2019–21. Benchmarks show CAC increasing across channels as competition for attention also increases. When you’re paying heavily just to get someone to try your app, your ROI horizon stretches uncomfortably long.
2. Squeezed spending power. Inflation has battered households. Nigeria’s headline inflation eased to 18.02% in September 2025, down from 20.12% in August, the sixth straight month of deceleration. But even at 18%, people are prioritising food, rent, transport, discretionary spends suffer.
3. Funding winter and selective capital. In tough times, VCs favour capital efficiency over growth stories. The IFC reports that venture funding across Africa has shifted toward startups with stronger unit economics and clearer paths to cashflow. 

So consumers have to prove real retention, strong margins and defensibility.

Why B2B (and embedded-finance) looks safer right now

If B2C is the high-variance play, B2B is the steady hand. Here’s why:

• Lower CAC per dollar of revenue. Selling to a business usually requires a longer sales process, but the ticket sizes are higher and the lifetime value is more predictable. When the numbers line up, monthly recurring revenue (MRR) beats one-off consumer spend every time.
• Clearer ROI for customers. Businesses pay for cost savings, compliance, productivity profits or revenue enablement. Those returns are easier to quantify, so you can price accordingly.
• Embedded finance & infrastructure scale. When you integrate payments, credit, or financial tools into business workflows, you capture value across transactions. Fintech firms embedding services into merchant flows or enterprise stacks are winning in this period.
• Reduced churn risk. Consumers abandon services quickly when times are hard. Businesses, even the informal ones, and especially those tied into operations, tend to stick unless value disappears.

In short, B2B gives you fewer customers, but each one is more likely to stick and to pay.

Hybrid doesn’t mean compromise: the smartest founders don’t treat this as binary

It’s not B2C or B2B, it’s how smart founders mix them.

The most resilient startups are those that:

• Build an infrastructure layer (payments, logistics, procurement) that serves businesses, and then expose consumer-facing products on top; or
• Start as B2C but quickly develop monetisable B2B channels (merchant tools, analytics, advertising for retailers); or
• Market directly to small businesses (MSMEs) that both buy and sell to consumers, a customer group with recurring cash flow. That’s monetising through cross-sell, e.g. merchant tools, data analytics, credit, even if the front door is consumer-facing.

In Nigeria, the informal economy, shops, kiosks, and traders, accounts for a huge share of activity. Moniepoint’s Informal Economy Report shows that 85% of informal businesses are sole proprietorships and only 40% employ labour; they buy goods via transfers and remain cash-heavy but represent concentrated purchasing power in local markets. 

Startups that serve these businesses indirectly serve consumers, while enjoying steadier revenues.

The founder’s checklist: questions you should ask now

If I were advising a founder deciding between consumer startups (B2C) or B2B today, I’d insist on answers to these:

• Can you prove payback in less than 12 months without heavy subsidy? If not, think twice about continuing consumer-first growth spend. If your cost to acquire a user is more than their lifetime value, you have a problem.
• Does your customer have a predictable spend line you can influence? Businesses that buy monthly or seasonally are better customers than an unstable consumer base.
• Is your product infrastructure-led? If others can replicate your consumer UI, you’ll be permanently on the defensive. The more you embed into workflows (payments, data, finance), the stickier your products become.
• Can you monetise through multiple channels? Can you diversify your revenue streams? Merchant fees, data services, and B2B subscriptions diversify risk. Don’t depend only on subscriptions or single product lines.

If you can’t answer them confidently, you risk building a house on sinking sand. In this market, metrics (downloads, DAU) are not a strategy.

Practical plays that work (examples and tactics)

Here are tactics I’ve seen succeed in Nigeria and across Africa:

• Merchant-first payments: Begin with payments or checkout solutions for small businesses, then layer credit, procurement, and analytics on top.
• Vertical SaaS + embedded payments: If you serve a vertical (e.g., agri-traders, clinics), embed payments, insurance and credit inside the software. You capture more of the value chain.
• Cost-reduction products: Logistics optimisation, energy-efficiency tools, inventory finance including products that reduce OPEX for clients are easier to sell in tight times.
• Anchor clients, then scale: Land a few enterprise contracts to validate your model, then expand horizontally.

These are high-leverage moves. They may require more sales tactics early, but bring more reward over time.

Where I’d put my chips now

If I were placing chips today, I’d lean into B2B and hybrid models while keeping a careful consumer startups arm alive for brand depth. The consumer market is fractured, loyalty is weak, attention is expensive, and regressions are common.

But businesses will always need tools, margin relief, and financial products. If you build what they can’t easily do without, you win.

So yes, B2C (consumer startups) is very much alive, but in this season of limitations, B2B is safer. And the hybrids? They’re the ones who will tell who thrives next.

That’s nearly 40 million businesses, collectively contributing 48% to the national GDP. Yet, 95% of these SMEs fail within their first five years, usually due to lack of funding, poor access to banking tools, and limited business support. 

With traditional banks retreating from riskier ventures, Moniepoint and FairMoney are stepping up. But in a country where only 1.3% of informal businesses earn above ₦2.5 million monthly, which of these lenders’ offerings go beyond quick cash? Which one truly understands what it takes to help an SME survive?

Let’s compare.

Business Model and Market Positioning

Moniepoint operates as a full-stack business bank designed specifically for SMEs and merchants in the informal economy. With over 600,000 active businesses onboarded and more than $1 billion in monthly transactions, it doesn’t stop at offering credit, it is building infrastructure. 

The company’s ecosystem includes POS terminals, business accounts, access to credit, and tools for managing operations, tailored to low-income, cash-heavy enterprises.

FairMoney, in contrast, began as a mobile lender and has evolved into a digital microfinance bank. With a user base of over 5 million, mostly individuals and micro-retailers, FairMoney focuses on high-speed lending with minimal friction. 

It processes over 15,000 loans daily, making it one of the busiest lenders in the market. But its SME support, while growing, is still very much credit-centred.

Verdict: Moniepoint provides a deeper ecosystem; FairMoney offers speed at scale.

Lending Approach and Credit Accessibility

Here, the difference goes beyond product to philosophy.

FairMoney provides loans of up to ₦5 million, approved in less than five minutes, with no collateral required. Interest rates can stretch from 2.5% to 30% per month, and repayment terms range up to six months. Credit decisions are made based on mobile metadata, BVN, and behavioural patterns, efficient, but impersonal.

Moniepoint, however, links credit access directly to a merchant’s transaction history and daily sales. It uses behavioural data drawn from its POS network and banking activity to offer context-specific loans, often with automated repayment via daily deductions. No app downloads or long forms, just performance-based access.

Verdict: FairMoney wins on speed and accessibility; Moniepoint wins on context and sustainability.

Support Tools Beyond Lending

This is where things start to diverge sharply.

Moniepoint offers SMEs:

• POS terminals
• Business current accounts
• Real-time sales dashboards
• Financial reporting tools
• Access to zero-debt and debt-based funding
• Insurance
• Agent and field rep support
• Formalisation support through its CAC partnership

FairMoney has done great in SME banking, but it still leans heavily on its lending app as the primary channel. Although it now offers savings products (like FairSave and FairLock), its business tools remain limited in scope.

Verdict: If your business needs more than a loan, Moniepoint offers the full toolkit.

Reach and Accessibility

FairMoney is completely digital, thriving on mobile penetration and app-based delivery. It’s well-suited for urban-based, tech-comfortable entrepreneurs. Its acquisition of Umba for $20 million in April 2025 is a signal of expansion, but primarily still in digital terms.

Moniepoint, on the other hand, is boots-on-the-ground. With thousands of field officers and a nationwide POS network, it reaches deep into underserved regions, including rural and peri-urban areas. Its services don’t rely on smartphone literacy or internet availability.

Verdict: Moniepoint wins on geographic and socioeconomic inclusion.

Customer Experience and Relationship Management

FairMoney is great in automated service. Its app is seamless and responsive. Customer queries are resolved through chatbots and live chat. But there’s little human follow-up once the money is disbursed.

Moniepoint provides dedicated relationship managers for its SMEs. There is human support for onboarding, training, dispute resolution, and transaction management. For many low-tech businesses, this level of handholding can mean the difference between adoption and abandonment.

Verdict: FairMoney is best for self-directed users. Moniepoint is better for relationship-driven businesses.

Strategic Moves and Financial Strength

FairMoney has posted commendable financial results:

• ₦121.9 billion gross revenue in 2024 (up 62%)
• Net profit of ₦5.85 billion (up 650%)
• Loan book of ₦168.5 billion
• Customer deposits grew by 73%
• Interest income reached ₦116.3 billion

It’s profitable, efficient, and growing fast.

Moniepoint, meanwhile, raised $110 million in late 2024 and secured a strategic investment from Visa in January 2025. It also acquired Kenya-based Kopo Kopo and invested in West Africa’s Payday. Beyond its numbers, Moniepoint is building infrastructure, not just capital.

Verdict: FairMoney leads on profit metrics and Moniepoint leads on strategic depth.

Social Impact and Formalisation

Moniepoint is pushing for systemic change. It has already helped formalise over 2 million businesses through its CAC partnership. Its 2025 Informal Economy Report revealed that 70.1% of supported SMEs have accessed credit, and 37.1% are women-led. It’s a fintech that is reshaping the structure of Nigeria’s informal economy.

FairMoney contributes through event sponsorships and mobile financial inclusion, but the impact is narrower and less structural.

Verdict: Moniepoint has a transformational vision. FairMoney is transactional.

Who Has the Edge?

The answer depends on what you’re looking for.

If you’re a small trader or micro-retailer who needs fast credit with no paperwork, FairMoney is an excellent option. It’s reliable, fast, and mobile-first.

But if you’re building a serious, long-term business and want a partner that offers tools, structure, and strategic backing, Moniepoint has the edge. It doesn’t just lend, it empowers. It doesn’t just serve users, it enables businesses.

In Nigeria’s SME economy, short-term survival and long-term growth are two different games. FairMoney helps you survive. Moniepoint helps you build.