Over the past five years, Nigeria’s startup ecosystem has expanded remarkably swiftly. The expansion of startups and Nigeria’s founders’ networks can be directly attributed to the influence that domestic and foreign partners have had on the tech sector.
Data showing expansion in the Nigerian tech sector primarily focuses on Lagos. Without question, Lagos has served as the hub for new businesses in Nigeria and all of Africa. a position it has kept thanks to data that investors may access.
For instance, Lagos became the regional leader in ecosystem values and early-stage funding in 2022, according to Startup Genome’s 2023 global startup ecosystem study. Over 400 start-ups are located in the state alone, which accounts for about 88% of all startups nationwide.
Although Lagos’s dynamic ecosystem has contributed to its investors’ attraction, one cannot neglect the role data has played in this regard.
Several other cities with almost invincible data have also accounted for significant growth in Nigeria’s ecosystem. The likes of Port Harcourt, Enugu, Anambra, Warri, Calabar, Aba, and Yenagoa must not be left behind when discussing startups and startup growth in Nigeria and Africa at large. The data coverage of startups in the South have been severely overlooked.
Instead of only looking at Nigeria’s expanding tech environment from a broad perspective, it could be helpful to take into account these cities and the appropriate coverage of their startup space.
This article’s focus, startups in the South, has not received enough attention in Nigeria’s tech community. This is because of several concerns, such as its geographic location, governmental regulations, innovation centers, and startup data.
The point is that startups thrive on patronage and funding. However, startups cannot receive patronage or funding if no one is aware that they exist.
Chris Smith, Managing Partner at Playfair Capital, noted in a Forbes report that location ultimately remains a factor in increasing the chances of funding. Lagos-based startups are preferred, as they are mostly coveted for funding and chosen as headquarters.
Uche Aniche, commenting on a report from StartupBlink in June this year, noted that the report had not reflected the startup reality in the South of Nigeria.
“I think it’s important to note that the report is not a true reflection of the ecosystem, whether in Port Harcourt or any other city covered by StartupSouth. For instance, listing only five Startups in Port Harcourt is ridiculous. Some of those Startups listed have been on their Database since 2019 (I believe).
I understand the role of Startup Founders and Ecosystem developers such as #StartupSouth as well as the State Governments in these rankings. However, the ranking organization needs to do better due diligence.
Uche Aniche
Responding to the query, Eli David, the CEO of StartupBlink, pointed out that data was essential to adequately gain knowledge of startups.
Government initiatives will significantly enhance the startup economy in the South of Nigeria. Over the past year, local VC companies have invested in more startups in Nigeria.
The Lagos State government, which is in charge of Africa’s largest startup ecosystem, announced the creation of a venture capital fund in October 2022.
The expanding government involvement might be what Southern Nigerian businesses need. Recently, there have been several summits on business innovation and MoU signings. Hopefully, these are stepping stones to something great.
The South offers significant room for improvement in Nigeria’s startup ecosystem. The region offers good ease of doing business, with few environmental bottlenecks that make it easy to run businesses seamlessly and successfully. Going forward, innovative ideas born in the South ought to be developed in the South.
