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.

Some unique deals still happen. LemFi, for example, raised $53 million in Series B early in 2025, its biggest round so far. But they are exceptions. Most startups in Nigeria do not manage to clear this gap, and I believe this lack of late-stage funding is one of the biggest risks to our tech sector’s sustainability.

What We Mean by the “Series B Cliff”

Series B is not about “more money.” It is a change in expectations. A startup at Series A is proving its product works, acquiring customers and showing early traction. By Series B, investors expect evidence of scale: solid unit economics, growth across markets, usually profitability or a clear path to it.

In Nigeria, many startups do prove traction. But moving to that next level, expanding nationally or regionally, improving margins, handling regulatory and foreign exchange risks, is much harder. The cliff appears when the risk of scale is too great, when external factors stack up, and when investors become sceptical.

Structural Challenges Holding Us Back

There are multiple structural problems. Some are external. Some within our control. Together, they make the Series B stage difficult to cross.

• Risk Aversion & Global Investor Doubt
  Many foreign investors now demand stronger proof of stability before committing late-stage capital. Macroeconomic instability (inflation, currency fluctuations) makes projections unreliable. Investors see higher risk in Nigerian startups compared to similar ones elsewhere in Africa or globally, and they price that risk either by demanding more control or by withdrawing entirely.
• Weak Exit Opportunities
  For Series B to make sense, there must be credible exit routes such as acquisitions, IPOs, or secondary markets. In Nigeria, large exits are still rare. When exits don’t happen, investors find it hard to justify taking big risks with late-stage funding.
• Corporate Governance and Transparency
  Many startups at seed or Series A have minimal structures: sometimes weak financial reporting, limited board oversight, and loose cost controls. Late-stage investors demand maturity: audited accounts, clear governance, accountability. When those aren’t in place, deals stall or valuations suffer.
• Capital Scarcity for Growth Rounds
  While seed and A-round funding have grown thanks to angel investors, incubators, and early-stage funds, there are comparatively few growth funds in Nigeria willing to lead or participate in large B rounds. Local LPs (pension funds, mutual funds) are careful; regulatory friction around foreign capital complicates large inflows.
• Macro Instability & Currency Risk
  The naira’s instability, difficulty obtaining foreign exchange, and inflation make cost structures unpredictable. For businesses that depend on imported inputs, software subscriptions in foreign currency, or paying overseas partners, this risk can incapacitate margins when scaling.
• Market and Infrastructure Barriers
  Scaling requires infrastructure: reliable power, logistics, and internet latency. In many parts of Nigeria, local infrastructure is weak. Operational costs rise, and unpredictable outages happen. These extra burdens make scaling beyond Lagos expensive and risky.

The Cost of Hitting the Cliff

When startups cannot secure Series B or late-stage backing:

• Growth slows. They may lay off staff, reduce marketing spend, or halt plans to expand into new regions or countries.
• Innovation is stunted. Features, talent hires, R&D often are deferred or dropped.
• Talent may leave. When funding is uncertain, senior hires often prefer safer roles or move abroad.
• Ecosystem morale suffers. When founders and VCs see many good companies stagnate, fewer entrepreneurs attempt ambitious scale-ups.

Examples:

• LemFi’s success is the positive side. 
• Arnergy, in the renewables sector, raised $18 million Series B in 2025, but employees pointed out how difficult it was to get liquidity until after that round. The gap in cash between rounds creates real hardship.

How We Can Fix This: Mitigation & Path Forward

I believe there are concrete, actionable ways the ecosystem can reduce the gap. Some require policy changes. Others are internal to startups or investors. All must happen together.

• Grow Local Growth Funds
  We need more funds based in Nigeria (or managed by Africans) that understand the risk profile here. These growth-stage funds must have patience, take larger checks, and bear risk that foreign investors avoid.
• Policy Stability & Regulatory Certainty
  Clear rules for foreign investment, stable regulation, easier repatriation of profits, sensible taxation on startups. When policies flip frequently, investors pull back. Government must show it understands growth-stage needs.
• Strengthen Corporate Governance
  Startups must prepare earlier: audited financial reports, boards that include independent members, clearer financial controls. That builds trust for late-stage backers.
• Encourage Exit Market Development
  Stock exchanges need to streamline IPOs for tech companies. Secondary markets for private shares would allow founders and early investors liquidity without waiting for acquisition or IPO.
• Leverage Alternative Financing Structures
  Hybrid structures (debt + equity), revenue-based financing, and convertible notes could help bridge rounds. These structures distribute risk differently and may attract investors unwilling to lead a pure equity round.
• Manage Cost & Efficiency Early
  Founders should build for profitability early: unit economics must be straightforward, margins tracked, and customer retention high. Scaling quickly without sustainable cost base is dangerous.
• Matchmake Corporate Partnerships
  Strategic corporate investors (local or multinational) can provide revenue contracts, distribution channels, and infrastructure support. Working relationships with corporates reduce risk and may be stepping stones to larger funding.

Looking Beyond the Cliff

The Series B cliff is not inevitable for startups. I don’t believe we’re stuck. We have proof of concept in LemFi, Arnergy and a few others that some Nigerian startups can break through. But to shift from a handful of wins to widespread scale, we need maturation in investment behaviour, stronger governance, more stable macro conditions, and growth-stage financing infrastructure.

If I were advising policymakers, I’d push for reforms now. If I were advising founders, I’d urge planning for the scale hurdle from day one. Crossing the cliff will demand discipline, transparency, and patience. But once we do, Nigeria’s startup ecosystem will compete globally.

Across the continent, founders are building products at record pace, but too many fail to scale. While African startups raised $2.6 billion in venture capital in 2024, a decline from 2023, poor user experience and weak product design have been among the top reasons why early-stage ventures collapse. 

It’s no coincidence that between 2022 and 2024, design thinking adoption among African startups rose by over 30%. Though uneven across sectors, this shows that technology without human-centred design rarely survives, leaving scale and retention elusive.

This is where Lucky Ekezie steps in. A product designer, mentor, and AI advocate, Lucky has made it his mission to build systems that don’t just look good but actually work for people, driving adoption, retention and measurable growth.

He transforms scarcity into opportunity, creating solutions that make startups investor-ready, user-ready, and scalable.

“Design isn’t just about interfaces,” he says. “It’s about people, resilience, and building systems that help others thrive.”

From his early days in Umuahia, where he built toys from scraps of wood and tin, to designing Bosscab, a ride-hailing platform for African cities, and Syncventory, an inventory management tool for SMEs, Lucky has turned curiosity into impact. 

Beyond products, he mentors emerging designers, develops AI-driven productivity solutions, and creates frameworks that help startups survive and scale where others fail.

Reimagining Tools for African Realities

In 2020, when the pandemic forced businesses across Africa to rethink operations, Lucky joined Nugi Technologies. There, he helped build Bosscab and Syncventory, platforms designed with Africa in mind, not Silicon Valley copies; they were tailored to local infrastructure, culture and user behaviour.

At Nugi, he mentored younger designers, embedding curiosity and user-first thinking into the culture. That kind of mindset shift is exactly what Africa’s growing ecosystem needs. 

In Q1 2025 alone, 83% of AI startup funding in Africa was concentrated in Nigeria, Kenya, South Africa, and Egypt, but funding without solid design foundations risks being wasted. Lucky’s work shows how product design can bridge that gap.

Lessons From Failure

Lucky’s resilience is built on hard lessons. His first startup, Gianx, shut down due to funding challenges, but it became his training ground in business structure and timing. 

Those lessons later informed his contributions to My Skool Tool, a school management platform founded by ThankGod Maduka Kalu. Today, it serves over 10,000 students, a direct result of design choices that prioritised usability and scalability.

Where many see failure as an end, Lucky treats it as raw material, the same way he once treated tin containers and wood scraps as a child.

A Mentor Building People, Not Just Products

By 2023, Lucky had expanded his mission beyond building products to building people. At LM Tech Hub, he mentored aspiring African designers trying to break into tech. Later, at CareerFoundry, he began teaching design thinking and product development to learners worldwide.

The results are measurable. Over 80% of CareerFoundry graduates secure jobs within six months, with mentorship ranked as one of the strongest success factors. For Lucky, it’s more than statistics. Mentorship is about instilling confidence. 

For a continent where over 5,000 young professionals transitioned into tech careers through incubators since 2020, his work sits inside a bigger story, where Africa’s design uprising is being shaped by teachers, not just by tools.

At the Edge of Africa’s AI Boom

Africa’s AI market is projected to hit $4.51 billion in 2025, growing at more than 26% annually. By 2030, AI could contribute up to $2.9 trillion to Africa’s GDP. These are huge figures, but they mean little if Africans are not building solutions for themselves. Lucky is already positioning to ensure they do.

In 2025, he delivered a talk at Tech Flock titled “From Sci-Fi to Reality: The Evolution of Artificial Intelligence”. In it, he charted AI’s history, human impact, and opportunities for Africa. Today, he is developing an AI-driven productivity platform aimed at helping both individuals and enterprises work smarter.

While global companies like Microsoft and G42 are pouring $1 billion into AI infrastructure in East Africa, Lucky represents the individual innovators ensuring that Africa doesn’t just consume these technologies but also creates homegrown solutions.

Why Lucky’s Story Matters

Nigeria’s tech ecosystem is one of the largest in Africa, accounting for over 25% of the continent’s venture capital inflow. Lagos is a top innovation hub, but behind the statistics are challenges, including unreliable infrastructure, high failure rates, and limited mentorship pipelines. People like Lucky Ekezie are shifting that narrative.

From sketching human figures on a blackboard as a child in Umuahia to building products, mentoring global learners, and pushing Africa’s AI story forward, Lucky Ekezie embodies the resilience and creativity that African innovation demands. His career is proof that design is not secondary to technology, it is its beating heart.

And perhaps that is the real problem he is solving: proving that in Africa, technology will not thrive without design rooted in people, culture, and context.

The project, backed by a ¥1.6 billion grant — that’s about $12.1 million or over N18 billion — and is aimed at raising tech entrepreneurs across the country.

The deal was formally signed in Abuja at the Ministry of Budget and Economic Planning, where government officials and Japanese delegates gathered to finalise the agreement. Representing Nigeria was Senator Abubakar Atiku Bagudu, while Mr. Hitoshi Kozaki stood in for Japan.

No long talk — this is about serious business.

This is beyond just a normal handshake in the name of “partnership.” The Japanese money is going into bricks, networks, and brains.

The Abuja innovation hub will rise as a central structure in Nigeria’s growing tech ecosystem, and it’s not just about the building — it’s about what’s going to happen inside it. Talent will be shaped. Ideas will be tested. Ventures will rise.

Over the next five years and eight months — from April 2025 until December 2030 — the National Information Technology Development Agency (NITDA) and the Nigeria Sovereign Investment Authority (NSIA) will jointly steer the project. The goal is to get young Nigerians to create businesses that can scale beyond Nigeria and rival some of Africa’s top startups.

There’s a clear line from this project to the presidency. President Tinubu’s Renewed Hope Agenda has been flagged as the backdrop for this initiative, a comprehensive economic blueprint that leans on tech and private sector investment to drive job creation. 

Kashifu Inuwa, director general of NITDA, pointed to earlier collaborations with JICA, particularly the iHatch incubation programme, which he described as a concrete example of results.

“We have been collaborating with them on so many initiatives like iHatch. The pilot we did resulted in creating over 117 direct jobs and more than 370 indirect jobs, and now we are working together with them to expand it to all 36 states and the FCT,” he said.

The iHatch programme offers six months of startup incubation, helping teams build real products using Japanese technical support. It’s the kind of targeted intervention that goes beyond workshops and buzzwords. Real ventures. Real jobs.

But it doesn’t stop there.

NITDA and JICA have also been connecting the dots between Nigerian and Japanese innovators. Startups are getting the chance to network, learn, and even showcase their products in Japan — a rare opening in a country where international exposure can be a game-changer.

Women aren’t being left out of the equation either. Last month, both agencies rolled out the “IgniteHer” Entrepreneurship Bootcamp — a five-day intensive in Abuja aimed at giving women founders the tools to break structural barriers and scale their businesses.

There’s a lot on the table. Money, mentorship, access, and infrastructure. What remains is execution.

With an academic foundation in engineering, Mayowa’s knowledge and expertise spans across fields.

She holds a Bachelor’s degree in Computer Engineering from the University of Oklahoma and a Master’s in Electrical Engineering from Cornell University.

She later added a Kellogg Executive Scholar certification in Non-Profit Management from Northwestern University to her credentials, showcasing her dedication to continuous learning and leadership.

A Trailblazer in Tech

Mayowa’s journey from Silicon Valley to global influence in tech highlights her dedication and hard work.

Starting as an Advanced Software Engineer at Altera, she significantly enhanced software and hardware development processes.

Her achievements set the stage for her future leadership roles and the founding of Dyvintel, a business intelligence firm serving top executives.

Her time at Altera was transformative.

“My work required precision; the slightest error could cost the company thousands,” Mayowa Ijisesan recalls.

By automating repetitive tasks, Mayowa boosted efficiency, showcasing her innovative spirit.

“I wrote a program that did the job for me,” she explains. This innovative spirit marked the beginning of her journey in tech, demonstrating her ability to find new ways to increase efficiency.

However, an unexpected opportunity led her to establish Dyvintel.

“My boss at that time called me into her office and asked if I had ever thought of starting a company. She said if I did, they’d be my first clients. And the rest as they say is history.”

Encouraged by her former boss, she founded the firm. The firm focused on offering Data Analytics and Business Intelligence and solves problems for companies in the US and Canada.

However, Mayowa did not foresee the challenges she would come to face in business development and marketing but her experience in ministry strengthened her skills in this area and prepared her ahead, solidifying her impact in the tech industry.

Mayowa Ijisesan: Addressing Challenges in the Nigerian Tech Ecosystem

Mayowa identifies key challenges like infrastructure issues and the need for high-quality data in AI development. She emphasizes the difficulty of securing funding without strong venture capitalist relationships.

Despite these challenges, she sees immense potential in AI across fintech, agriculture, healthcare, education, and e-commerce.

With Nigeria’s large, youthful population and vibrant startup scene, Mayowa believes in the country’s capacity for growth and innovation.

Empowering Through Ministry and Community Initiatives

Beyond her professional achievements, Mayowa Ijisesan contributes significantly through ministry. As the Resident Pastor of KingsWord International Church in Chicago and EVP of Strategy for KingsWord Ministries, she expands the ministry’s global reach.

Her initiatives, like Career Resources and Thrive Women’s Conferences, demonstrate her commitment to empowering individuals and communities.

Mayowa Ijisesan’s remarkable journey extends beyond personal achievement—it serves as a testament to visionary leadership and community impact.

Her relentless pursuit of excellence, coupled with a deep commitment to service, exemplifies the transformative potential of technology when aligned with purpose. As she continues to break barriers and inspire others, Mayowa stands as a beacon of hope and innovation in the tech industry.

Her story reminds us that true leadership transcends mere professional success; it is about uplifting others and creating an environment where everyone can thrive. In our rapidly evolving world, Mayowa Ijisesan isn’t merely driving change—she is shaping the future.