6 Nigerian Startups Shut Down As Funding Woes, Regulatory Hurdles Persist

A new report by Startup Graveyard revealed that six out of the eleven African startups that shut down, hibernated, or entered administration in 2024 were based in Nigeria, highlighting persistent challenges in the country’s tech ecosystem.

While funding shortages remained the leading cause of startup closures across Africa in 2024, a fresh trend emerged: startups failing to achieve product-market fit after branching out into new services. Companies like JumiaFood and BuyCoins Pro discontinued newly introduced offerings due to poor market response, prompting a return to their core services.

Among the Nigerian startups that shut down this year are ThePeer, HerRyde, Chopnownow, Cova, BuyCoins Pro, and Quizac. Other shuttered African startups include GroIntelligence, CopiaGlobal, RejaReja, and iProcure—all from Kenya—and LetsChat, which operated in multiple countries.

Beyond funding issues, Nigerian startups continue to grapple with deep-rooted regulatory and structural challenges.

The report cited unpredictable regulations and unreliable power supply as key obstacles, with fintechs especially impacted by recent government policies like the Electronic Money Transfer Levy (EMTL) and cybersecurity levies.

The regulatory climate has forced some startups to pivot business models just to stay afloat, moves that can deter international investors and stunt growth.

According to Crunchbase data cited in the report, only nine of over 1,200 global unicorns are African. The lack of capital and a VC ecosystem concentrated in just a handful of markets, namely Nigeria, Kenya, South Africa, and Egypt, have left many startups struggling to scale.

While investors are urged to better understand the nuances of Africa’s markets, the report emphasised that startups must also prove their profitability to secure long-term funding and stability.