Today: Apr 23, 2024

Nigerian startups tapped into $415M of $2.1B funding in a decade, reveals report.

4 months ago
  • Nigerian startups borrowed over $415 million out of the $2.1 billion funding accessed by African startups in the last 10 years.
  • A recent report by Briter Bridges reveals that Nigeria ranks second behind Kenya in terms of loan capital received by startups.

A new report by Briter Bridges, a research and market intelligence firm, has shed light on the debt financing landscape for African startups. According to the report, Nigerian startups borrowed over $415 million out of the $2.1 billion funding accessed by African startups over the past decade.

The report, titled “Debt Financing in Africa’s Innovative Ecosystem”, highlights the rapid growth of Nigeria’s tech scene and the challenges it faces. While the country’s startup ecosystem is thriving, the high levels of borrowing indicate a reliance on debt financing for growth.

Between 2014 and 2023, African startups as a whole borrowed a total of $2.1 billion, with Nigeria ranking second behind Kenya in terms of loan capital received. Kenya secured $800 million in debt financing, while Nigeria received $415 million.

The report also reveals that over 75% of the total loan investment received by African entrepreneurs came from the main four countries: Nigeria, Kenya, Egypt, and South Africa. Cleantech received the largest portion of the stated loan capital, with pay-as-you-go items and solar house kits being the most funded. In the fintech sector, almost 25% of debt capital went towards buy-now-pay-later and asset finance.

Some notable debt deals include a $200 million raise by Kenyan startup Mkopa, $130 million by another Kenyan startup, Sunking, and $50 million by Nigerian startup Lumos. These transactions highlight the significant funding opportunities available to African startups and their potential for growth.

Despite the concerns surrounding debt financing, the future of Nigerian startups remains bright. The country boasts a young, tech-savvy population and a thriving entrepreneurial spirit. With careful planning and responsible debt management, Nigerian startups can leverage this debt to fuel their continued growth and become a driving force in Africa’s digital transformation.