Nigerian startups are having a moment. Tech startups based in the African nation raised more than $1 billion of capital in 2021 from more than 300 individual and institutional investors, representing a more than 60% increase over the amount raised between 2018 and 2020.
A year ago, Flutterwave, a payment-processing firm based in Nigeria’s capital city of Lagos, raised the equivalent of $170 million in Series C funding, giving the company a valuation of more than $1 billion. By February 2022, it had tripled its valuation to $3 billion, making it Africa’s most valuable startup (notwithstanding recent accusations of shady financial practices against its co-founder and CEO, Olugbenga Agboola).
Meanwhile, back in October 2020, the U.S. fintech giant Stripe acquired Nigerian payment processor Paystack for over $200 million.
These and other developments have given the capital city of Lagos a growing reputation as the African continent’s most attractive magnet for foreign tech investment.
Here are four of the Nigerian startup scene’s recent breakout stars.
Razaq Ahmed, co-founder/CEO, CowryWise
Born in Kano, Nigeria, Razaq Ahmed is the co-founder of Lagos-based fintech Cowrywise. Founded in 2017, the company offers a digital savings platform that makes premium financial services more accessible to the mass market. It automatically saves a specified sum of money from each user’s savings account to their Cowrysise account every month, earning almost double the interest offered by any bank.
During his childhood, Razaq’s family was vulnerable to the ethnic conflict that has periodically torn Nigeria’s social fabric. In the summer of 1999, during violent clashes between the Hausa and Yoruba ethnic groups, 14-year-old Razaq and his family were narrowly rescued from a mob attack by the Nigerian army.
After the Ahmeds relocated to his parents’ hometown of Ogbomoso, Razaq eventually went on to earn First Class academic honors while studying economics at Obafemi Awolowo University. Upon graduating, he worked as a research analyst and business economist at companies like the Nigerian capital market conglomerate Meristem Securities, Vetiva Capital Management, and the Shell Petroleum Development Company of Nigeria.
After earning his Chartered Financial Analyst certification in 2012, Razaq got his entrepreneurial start by founding Sart Partners, a boutique investments-management firm. By 2017, he was inspired to launch Cowrywise after repeatedly hearing customers ask how they could invest modest sums of Nigeria’s currency, from 1,000 to 50,000 naira.
Cowrywise introduced its automatic savings option to enable customers to save and invest as regularly and effortlessly as possible, without having to go out of their way to do it.
“What we’ve done is to make investment as simple as sending a Tweet,” Razaq told CNN. “It’s resonating very well with the younger generation, and that is the next stage for investment—not just in Nigeria; it’s a global trend.”
Etop Ikpe, founder/CEO, Autochek
Etop Ikpe is a serial entrepreneur in Nigeria’s technology sector. He has been involved in the launch of a number of startups over the past 16 years, 5 of which were tech businesses.
His latest venture is Autochek, a firm that makes it easier and safer to buy and sell cars in Nigeria. Founded in the fall of 2020, the startup offers a one-stop smartphone app where customers can find car repair, maintenance, and buying and selling services.
A graduate of the University of Lagos, Ikpe started his first business in 2006, when he co-founded Click Mobile Communications and served as its director of projects. Since then, he’s helped launch a dizzyingly diverse array of companies, from the now-defunct ecommerce platform DealDey to the used-car-sale platform Cars45 to the online fashion store Three Stitches.
Ikpe told Techpoint Africa that ten years from now, he hopes Autochek will have expanded its operations to up to 25 African countries, with up to 10,000 dealerships and all the major banks across the continent using the platform to extend loans to customers.
Though he has yet to stay at any one company for more than 4 years at a stretch, Ikpe says he doesn’t operate on any particular timeline: “The most important thing is that I’ll always do things that overall build the value of what we’re creating.”
Damilola Olokesusi, co-founder/CEO, Shuttlers
Nigeria is no exception to the gender diversity problem that plagues the venture capital field worldwide. Less than 1% of the roughly $5 billion raised by African startups in 2021 went to companies with female founders or CEOs. Yet Nigerian women entrepreneurs like Damilola Olokesusi, co-founder and CEO of the transport tech startup Shuttlers, are finding ways to overcome that obstacle.
Shuttlers lets urban commuters hail minibus rides along fixed routes. It claims that its service is 60 to 80% cheaper than what the competition offers, which may explain the more than 500 million rides it says it has sold since its launch in 2015. The company sets out to combat the inconveniences and dangers of commuting in Lagos, including especially the hours of traffic involved and the risk of being kidnapped or robbed or held hostage during a ride.
After earning her Bachelor’s degree in chemical engineering at the University of Lagos in 2012, Olokesusi landed a day job at a safety engineering company and started a social media marketing side hustle. This work entailed commuting to and from countless meetings in danfos, yellow commercial minibuses used widely in Nigeria for mass transit.
With all that commuting, Olokesusi found that in addition to the traffic snarls and the danger involved in riding the danfos, Lagos’ main transit alternative, ride-hailing cabs, were too expensive and not safe enough to attract many riders. It gave her the idea to repurpose the kind of private minibuses she’d ridden at work in the past and offer them to a mass market.
Now, Shuttlers runs buses with free Wifi and air conditioning. Through its website and smartphone app, the company offers customers prorated subscription packages and the option to track their bus, view the nearest vehicle, to register and pay online, and to find vacant seats.
Along the way, Olokesusi faced family pressure not to pursue such a risky venture and prospective business partners who didn’t take women seriously. But the biggest obstacle may have been her difficulty securing venture capital funding due to lack of market traction. Indeed, by the end of 2020, Shuttlers still hadn’t raised any external venture capital. Its funding came entirely from grants.
But Olokesusi says the lack of VC finance worked out fo the best, because it forced her and her partners to come up with creative ways to make Shuttlers sustainable, turning it into one of Nigeria’s longest-running transport tech startups.
“There was no allowance to burn cash or chase growth over profit,” she told Techpoint Africa. “We had to choose profitability from the get-go, and we’ve been able to turn 1 naira into 1 million nairas.”
Temie Giwa-Tubosun, founder, LifeBank
Startup founder Temie Giwa-Tubosun was born in Nigeria but immigrated to the U.S. at the age of 15, before eventually returning to the land of her birth. Her company, LifeBank, has tackled the chronic shortage that plagues Nigeria’s blood supply.
Through its app, LifeBank manages the logistics of collecting blood from blood banks and delivering it to hospitals, along with other medical supplies such as oxygen and drugs.
After immigrating to the U.S. with her family in 2001 and attending high school and university in Minnesota, she took a grad school internship back in Nigeria. As an intern, she worked with a low-income pregnant woman who endured 3 days of labor and whose baby sadly died soon afterward. Giwa-Tubosun has dedicated herself to combating maternal mortality in Nigeria ever since.
In February 2014, she gave birth to her first child prematurely at a hospital back in Minnesota, a delivery that she described as “complicated and harrowing.” Recognizing that she might have bled to death if she had delivered the baby in Nigeria, Giwa-Tubosun founded LifeBank in January 2016, incubating the firm at the Co-Creation Hub in Lagos.
Since then, Lifebank has worked with up to 670 hospitals, delivering 28,000 vital medical supplies and saving over 10,400 lives. It’s now expanding into other regions of Nigeria, as well as other African countries such as Kenya and Ethiopia.