He made this known today, Thursday, December 4, at the ongoing Art of Technology Lagos 7.0, holding at the Landmark Event Centre.

Themed “Future Technologies & a Sustainable Lagos”, AOT Lagos 7.0 marks seven years of bringing together the city’s full innovation ecosystem, including founders, developers, entrepreneurs, financiers, academia, and policy-makers. 

Over those years the state has built a solid and broad infrastructure. “We are the de facto IT department for Lagos State,” Alake said, “managing connectivity, data centres, ERP systems, smart-city implementation, and driving public-service digitisation through government.”

Among the State’s achievements he disclosed that between 2019 and 2024, Lagos-based tech startups attracted over $6 billion in funding, representing more than 70% of Nigeria’s total tech investment inflows. 

Alake said that today the ecosystem is roughly valued at $15.3 billion, with Lagos accounting for 80–90% of the country’s startups, making it “the largest startup concentration on the continent.”

He explained how the state government is supporting this boom. Through Lagos State Science Research and Innovation Council (LASRIC), more than 75 startups have been funded, and over 85 research and development initiatives across four to five major universities are currently supported. 

Some of these initiatives have already produced commendable results, including research patents and spin-off companies in areas like climate resilience, green energy, agritech and construction tech.

In addressing infrastructure, Alake disclosed that Lagos now has about 15,000 kilometres of fibre-optic cables, having expanded connectivity by roughly 500 km per year on average. 

This fibre backbone supports public schools, hospitals, government buildings and businesses, a foundation for a truly digital Lagos.

On the public-service side, Alake pointed to the success of the Lagos State Digital Service Portal, launched at last year’s AOT. The portal has recorded over 50,000 unique visitors in the past 60 days alone, enabling citizens to file taxes, apply for planning permits or digital identity, and access other government services online. 

He said work is underway to enhance the portal into a unified gateway for all citizen and business services.

At AOT 7.0, Alake also announced the forthcoming Lagos Innovation Bill, a legal and regulatory framework designed to embed innovation in the state’s economic DNA. 

Once passed, the Bill will, among other things, require large companies in sectors such as telecoms, energy and infrastructure to collaborate with universities and research institutions when seeking solutions. 

For example, building local capacity to design base stations rather than importing equipment.

By 2030, Lagos plans to increase the contribution of IT and innovation to the state economy by 100%, and stimulate a 50% rise in scientific research and invention directed at solving Lagos-specific challenges. 

Alake said, “If you have a technical problem, Lagos is the place to solve it,” stressing that this vision requires “coordination, collaboration, and all of us, working hard, putting aside differences, and moving on shared vision.” 

He called on everyone in the ecosystem, including the government, private sector, academia, investors, and citizens, to contribute.

The ultimate goal is to make innovation a permanent feature of Lagos’ economic and social life.

But in 2025, the tables have turned. The ‘Giant of Africa’ now looks like the continent’s middle child, still the great startup hub, but subtly losing attention.

Across Africa, startups have raised about $2.2 billion in funding so far this year, through September. It’s not a bad figure, in fact, it shows a comeback after 2024’s sluggish performance. 

But Nigeria’s share of that pot is behind. Once the darling of venture capital, the country now follows Kenya, South Africa, and Egypt behind in investor flow and deal flow. We could say this decline reveals cracks in policy, perception, and predictability.

The Numbers

Let’s look at the facts. In the third quarter of 2025, African startups collectively pulled in hundreds of millions, a steady rebound from the funding winter of 2023-2024.

September alone saw between $140 million and $160 million in disclosed deals, a strong 430% recovery from August’s slump. South Africa topped with roughly $64 million, followed by Nigeria’s $44 million, Kenya’s $22 million, and Egypt’s $15 million.

Yes, Nigeria ranked second that month, but context matters. A single month’s uptick doesn’t reverse a year-long slide. The $44 million figure looks good until you recall that just two years ago, Nigeria regularly attracted over 40% of Africa’s total venture capital. Today, that has thinned, the rebound is real, but the lead is gone.

It’s not that Nigeria didn’t have highlights. Lagos-based Kredete closed a $22 million Series A round, one of the continent’s biggest in the month. But a handful of bright spots cannot disguise the bigger difference. Nigeria’s once-dominant startup sector is now fighting for air.

Why the Slide? The Risk Equation

There’s no single villain here. It’s a mix of currency challenges, policy inconsistency, and investor fatigue.

1. Currency Risk and FX Instability
Let’s start with the obvious, the naira. Investors hate surprises, and Nigeria’s currency offers plenty. A venture capitalist can invest $5 million today and see its real value drop by a quarter within months. For startups, it’s a nightmare: revenues in naira, debts in dollars, and no way to plan beyond next quarter.

Currency instability doesn’t just kill profit margins; it kills patience.

2. Regulatory Whiplash
One month, a fintech is celebrated for innovation; the next, it’s hit with a compliance directive or policy change that halts operations. The Central Bank’s unpredictable stance on digital assets, tax laws, and banking limits has left founders second-guessing the next move. For investors, unpredictability is more frightening than failure, you can’t plan for confusion.

3. Investor Confidence Erosion
Venture capital is about risk, but it’s also about trust. And Nigeria’s perception problem runs deep. The inflation rate, the liquidity problem of 2024, and the fear of policy reversals have pushed many funds to look elsewhere.

Kenya’s climate-tech growth looks more predictable. Egypt’s structured reforms provide clearer returns. South Africa’s venture-debt model gives investors better exit options. In comparison, Nigeria? Quite unstable.

4. Cost and Infrastructure Burden

Even the best Nigerian startups fight a heavier battle. Cost of power bites into margins, logistics are inconsistent, and security concerns increase overheads. The same $5 million that can comfortably sustain a startup in Nairobi or Cairo barely covers the basics in Lagos. Investors see this, and they price it in, or calmly move their money elsewhere.

5. Lack of Exit Opportunities

And then there’s the silence after success. Since Paystack’s 2020 acquisition, Nigeria has produced few visible exits. No IPOs, no major mergers, no new liquidity events. For investors, that’s a red flag. Without an exit, even the best-performing portfolio company becomes a waiting game. Venture capital doesn’t thrive on patience, it thrives on movement.

Meanwhile, Elsewhere in Africa…

Kenya, Egypt, and South Africa have been rebalancing the equation.

Kenya has turned climate-tech into a national asset. Its policy environment rewards clean-energy startups and provides tax incentives that attract green investors. 

Egypt, after years of reforms, now has one of the most transparent startup ecosystems on the continent. Its currency stabilisation plan and government support for digital infrastructure are winning back foreign confidence.

South Africa, on the other hand, plays a more sophisticated game. Its venture-debt market gives startups more flexibility and gives investors partial liquidity, a balance Nigeria still hasn’t mastered. 

Together, these hubs have built something Nigeria once had, predictability.

Reclaiming the Edge: What Nigeria Must Do Next

The thing is that Nigeria still has the best talent pool in Africa. Its entrepreneurs are fearless, resourceful, and globally aware. Innovation isn’t the problem; the system is.

To get back in the game of venture capital investment, Nigeria needs credibility, the kind that comes from action, not announcements.

1. Ensure FX Stability:
   A predictable currency policy restores trust faster than any PR campaign.
2. Create a Transparent Regulatory Environment:
   Investors can live with tough regulations, they can’t live with arbitrary ones. Nigeria must fix its fintech and crypto regulatory frameworks if it wants long-term funding.
3. Mobilise Local Capital:
   Pension funds, sovereign wealth vehicles, and high-net-worth individuals must be encouraged to fund innovation. Relying solely on foreign dollars is a risk in itself, unsustainable.
4. Build Exit Pipeline:
   Encourage IPOs, mergers, and acquisitions. When investors see others cash out, they come back, fast.
5. Fix the Basics:
   Energy, internet reliability, and logistics are not “startup issues”, they’re national competitiveness issues. Solving them will reduce risk and attract fresh capital.
6. Promote Investor Dialogue:
   Nigeria’s public and private sectors need to start speaking the same language. Investors hate surprises more than they hate losses.

The venture capital hasn’t left Africa; it’s just gotten pickier, and Nigeria has to earn trust again. The ideas, the founders, the products, they’re all here. What’s missing is a sense that the system itself won’t betray them.

If Nigeria can steady its currency, clean up its regulations, and show genuine respect for investor logic, its startup sector will recover faster than many expect.

Investors go where stability lives. If Nigeria can steady its policy, stabilise its currency, and show a consistent commitment to reform, its startup sector would reignite, with more venture capital investments.

The report tracks 288 tech hubs across 69 countries and ranks them based on growth in enterprise value, unicorn creation, and economic factors like cost of living and GDP per capita.

Lagos has grown its startup ecosystem valuation by 11.6 times since 2017 and produced five unicorns within the same period. 

Companies like Flutterwave, OPay, Moniepoint, and Interswitch have played huge roles in ensuring this growth. Dealroom places Lagos above Istanbul, Pune, Belo Horizonte, and Mumbai in the “Rising Stars” category, a segment that spotlights cities with speedy acceleration in innovation and venture value.

As stated in the report, “What sets Lagos apart is its ability to adapt quickly, develop locally relevant innovations, and scale despite systemic obstacles. This agility continues to propel the ecosystem forward, reinforcing the city’s status as a leading hub for technology and entrepreneurship in Africa.”

Lagos now holds an enterprise value of $15.3 billion, with five unicorns, and has achieved a threefold increase in unicorn production since the previous assessment period. 

Its cost of living was just 22% that of New York City, giving it a competitive edge for startup scalability. With a population of 21.3 million and a GDP per capita of $1,600, Lagos is working hard to overcome economic odds.

“While Lagos shows impressive growth, several challenges threaten to hinder sustained progress. Infrastructure remains a major concern-frequent power outages, high cost of data and unreliable internet can slow operations and increase costs. Additionally, talent retention is becoming an issue with relocation driven by working conditions and remuneration.” said Etemore Glover of the Impact Investors Foundation.

Nonetheless, Lagos is bolstering Africa’s innovation record. It is the only sub-Saharan African city featured at the top of any global category in the report, even outranking tech-forward cities like Johannesburg, Nairobi, and Cape Town.

For an ecosystem long overlooked in mainstream global innovation rankings, this is a commendable statement for Lagos State and its growth drive across the tech sector in 2025 and beyond.

Alake shared this figure at a breakfast meeting in Dubai, United Arab Emirates, during the ongoing GITEX Global tech expo, where he highlighted the State’s position as Africa’s largest tech hub.

Lagos is home to more than 2,000 tech startups, with a concentration of innovation and business ventures that make the city a driver of technological advancement on the continent. 

He noted that if Lagos were a separate country, it would rank among the top five or six economies in Africa, pointing to the economic importance of the tech ecosystem.

The Commissioner attributed this growth to the dynamic nature of Lagos, pointing out that around 80% to 90% of Nigeria’s entire startup ecosystem is based in the State. This, he said, makes Lagos a key player in technology across Africa. 

Among the prominent companies shaping the industry are fintech giants like Flutterwave and Opay, while other sectors such as agri-tech and construction technology are also gaining ground.

Alake emphasised that fintech dominates the ecosystem, with approximately 40% of startups in Lagos focusing on financial technology. However, innovations in other sectors are also contributing significantly to the region’s growth. 

He added that the Lagos State Government is playing an active role in supporting these ventures, from investing in startups to refining regulations to create a more conducive business environment.

The Commissioner also pointed out Lagos’s evolving position in the global tech landscape. Leveraging Nigeria’s partnership with the Dubai World Trade Centre (DWTC), organisers of GITEX, Lagos aims to bring international attention to the local ecosystem.

Alake urged global investors to seize the opportunity to engage with Lagos’ talented and dynamic workforce, which is shaping the future of African tech.

Notably, Lagos has the largest artificial intelligence (AI) market in Africa, with companies deploying various AI use cases. Earlier this year, the State launched Nigeria’s first large language model, which Alake said was designed with a focus on solving Nigeria’s specific challenges.

In a related development, Nigeria is set to host the GITEX conference in September next year, in collaboration with the DWTC. According to Trixie LohMirmand, executive vice president of DWTC, the event will provide Nigerian startups with access to capital and global business insights. 

LohMirmand highlighted the need to bring the world’s attention to Nigeria, stating that only a small percentage of the country’s 6,000 startups had previously been able to connect with global investors during the Dubai event.

Lagos remains a rich tech hub, attracting both local and global interest, with startups benefiting from a supportive entrepreneurial culture and a wealth of talent. 

However, challenges remain, particularly in infrastructure and regulatory frameworks, which must be addressed to ensure long-term success.