Over 51 percent of Nigeria’s startups face significant challenges in accessing funding, a new report by TLP Advisory reveals, spotlighting the fragile state of the country’s venture ecosystem.
This was contained in a report “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,” released to mark the firm’s tenth anniversary. According to the report, while venture capital investments peaked at $3 billion in 2021, startups today face mounting hurdles, including talent shortages, regulatory complexities, and operational inefficiencies.
The report pointed out that 51 per cent of surveyed startups reported difficulties in securing funding, with angel investors emerging as a crucial support. The startups surveyed noted that the difficulties in securing funding was primarily due to currency volatility and access to investors. Angel investors have emerged as a crucial funding source during this challenging period.
Beyond funding struggles, the report noted that startups are grappling with a devalued naira, which complicates raising and managing foreign investments. They are also saddled with regulatory challenges.
The report noted that 30 per cent of founders point to the regulatory environment as a significant barrier, emphasising the need for deeper engagement with policymakers under frameworks like the Startup Act.
Commenting on the findings in the report, co-founder of TLP Advisory, Odunoluwa Longe, said “despite the current tough macroeconomic climes, engaging with participants in this project ignited in me renewed hope and optimism for our ecosystem. We embarked on this project as our way of celebrating the ecosystem that made us, and this report reflects both the resilience and the evolution of the Nigerian tech ecosystem.
“It is not just about technology; it is about building a future where founders, investors, and the public sector work together to make Nigeria a leader in innovation and digital solutions. Over the past decade, we’ve witnessed, and have been part of, incredible success stories born from collaboration and adaptability, and we believe the best is yet to come.”
Also, executive director of FATE Foundation, Adenike Adeyemi, said “the most unexpected challenge for entrepreneurs in Nigeria has been the unstable and inconsistent regulatory and business environment. Founders here often have to navigate unique complexities, and a supportive policy framework is essential for unlocking their full potential.”
Speaking to the need for proactive policy engagement, Kola Aina of Ventures Platform said, “The ecosystem must become more deliberate and take the job of engaging in government policy design more seriously, ensuring we shape the policies that govern our industry.”
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