With Lagos developing to become one of the largest startup hubs in the whole of Africa, and unicorns springing from the states, it’s high time more startup founders recognize the need to build in other states while the governments make it convenient enough for their growth. 

“Nigeria’s climb is the result of Lagos’ success. Lagos has seen a massive jump of 41 places to 81st globally. It is the first African city to break into the global top 100, a milestone that should be celebrated (we should mention that Lagos already ranked 99th in 2019 but lost this position in 2020). This shows the immense potential of the ecosystem in Lagos.” StartupBlink report 2022.

According to the report, the only Nigerian cities that made it to the top 1000 were 3, including Lagos, Abuja and Ibadan. Among these 3, only Lagos had an acceleration, others had a deceleration, with the rest that were in the list for the previous years dropping out. “Several other Nigerian seed ecosystems dropped out of the rankings this year.”

“Consequently, the total number of Nigerian cities in the global top 1000 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,” the StartupBlink report further stated.

Out of 7 Nigerian cities on the list in previous years, the 3 that held fast but could go off if efforts are not heightened are described below:

Lagos 

Out of the 1000 cities, Lagos was ranked 81. The city went up 41 spots compared to last year, with total score of 8.378 and overperforming industry being foodtech.

Abuja

Abuja had a global rank of 473, a 7 spot drop compared to the previous year and a total score of 0.807. Abuja now holds the second position which was initially held by Ibadan.

Ibadan 

Ibadan dropped 308 spots, obtaining a global ranking of 661 and a total score of 0.424.

Some challenges mentioned in the report could be reasons why cities are not doing well in this aspect as the impact is higher in some than others. These challenges include:

• Shortage of financing options 
• Poor broadband internet infrastructure

For investment levels to increase as the report suggested, and despite the government doing its part to address the infrastructure deficit to enable its talented entrepreneurs achieve success faster, there must be targeted and sustainable inclusion among the various cities, strengthening zeal among these startups.

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.

Africa

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.

Nigeria

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.