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.