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Nigerian start-ups lead Africa, raise $237m

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Nigerian technology start-ups have led the continent by raising the highest amount of funds (over $1m) to scale up their operations in 2019.

Nigeria was followed by South Africa and Egypt in terms of amount raised, data collated by the Insights Director, Ecosystem Accelerator and M4D Utilities at GSMA, Maxim Bayen, stated.

According to the data, about 15 Nigerian tech start-ups raised a total of $237m in nine months.

 The 2019 data indicated that the equity and non-equity deals in Africa’s tech ecosystem were already over $530m by 61 start-ups.

Nigeria tech space over the years had become the most preferred investment destination for investors with the country’s start-ups raising $178m in funding rounds in 2018, according to a report by Techpoint Africa.

In January this year, Andela, an African-focused company that builds talented software engineers, raised $100m Series D funding led by Generation Investment Management with participation from existing investors, comprising Chan Zuckerberg Initiative, GV, Spark Capital, and CRE Venture Capital.

Nigerian fintech start-up, TeamApt, received $5.5m Series A fund from a number of investors led by a Nigerian venture capital company, Quantum Capital Partners.

In March, Carbon (former Paylater) got $5m debt facility from Lendable and Farmcrowdy got $1m seed investment from Ajayi solutions and two other investors.

Kudi, a digital payment start-up, got $5m Series A investment from a French venture capital, Partech in April; and MDaaS Global received $1.1m seed round from investors led by Alitheia Capital in the same month.

Gokada raised $5.3m Series A round from Rise Capital and three other investors in May.

Anergy raised $9m Series A round from Breakthrough Energy Ventures and three other investors and Max raised $7m from Novastar Ventures, Yahama Motor, Breakthrough Energy Ventures, Zrosk Investment Management and Goodwell Investments.

The industry data indicated that in July this year, Opay got $50m from Sequoia China, IDG Capital, Source Code Capital and Opera.

54gene raised a total of $4.5m from Y combinatory, Fifty Years, Better Ventures, KdT Ventures, Hack VC and Techammer as of July.

 In August, TechAdvance, a fintech start-up, received $1m funds from Lamar Holding; and Kobo360, a logistics and transport company, $30m from Goldman Sachs, Asia Africa Investment and Consulting, TLcom Capital, Y Combnator, IFC and some Nigerian banks.

In September, Kuda, a digital bank closed a $1.6m pre-seed round from Start-up bootcamp, Haresh Aswani of the Tolaram Group, Ragnar Meitern and investors.

FairMoney, a lending start-up with operations in Nigeria, raised $11m in a Series A round led by Flourish, a subsidiary of Omidyar Group.

Speaking recently, the President, Institute of Software Providers of Nigeria, Yele Okeremi, noted that though funds from venture capitals were perceived to be beneficial to the country, it could hurt the ownership structure of the businesses in the end.

“Although, some people believe that these funds are Foreign Direct Investment and beneficial to the country, but that would have been a sound argument except for the fact that if you allow too much foreign interest into your economy, then you own nothing at the end of the day,” Okeremi said.

He added, “The FDI is good and should be encouraged but if we know what we are doing, it should be a fraction of the local investment.  Start-ups are better off having the bulk of their capital form local investors than when it is from foreign investors.”


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