Covid-19 pandemic, oil price slump and civil unrest have hammered Nigeria’s economy this year, but the tech start-up scene in Africa’s most populous country has continued to thrive. The number of internet users in the country is surging, hitting 140 million people in June. Nigerian start-ups are capitalizing on this shift, raising $747m last year. Leading the way are fintech firms, as entrepreneurs look to serve the 40% of Nigerians that are remain unbanked and meet gaps in the market that have not been met by incumbent providers.
Nigerian fintechs that have drawn investors’ attention, include mobile money service Opay, payment app Palmpay and challenger bank Kuda, which have all raised large sums of money since November 2019. Lagos-based Interswitch received $200m of funding from US payments group Visa to value it at more than $1bn and become Nigeria’s first home-grown unicorn, while another start-up, Paystack, was acquired for a reported $200m by Silicon Valley-based payments giant Stripe. Nigeria is increasingly becoming the gateway into the African start-up world for most landing into the continent for the first time. Nigeria entering its second recession in five years, the business climate still lags its west African peers. In the World Bank’s 2020 Ease of Doing Business ranking, Nigeria ranked 131 out of 190 countries, held back by poorly developed transport and energy infrastructure, and inefficiencies in both the judicial and dispute settlement systems.