How Nigerian startups raised $219m in Q1

Not less than eighteen Nigerian startups raised at least $219m in the first quarter of the year, according to a report by ‘Intelligence by Techpoint’.

This is 395.5 per cent of what was raised in Q1 2020, and almost double (181.7per cent) what was raised in 2020.

Fintech accounted for 93.09 per cent of the amount raised in Q1. Flutterwave’s $170m accounted for a large chunk of this.

A total of $4,600,000 was raised locally; $210, 869,767 was foreign investments; $3,550,000 was raised in joint participation between foreign and local investors.

It is expected that the startup space raises higher than $377.4m it recorded in 2019.

Despite the COVID-19 pandemic, funding into the Nigerian startup space continued to rise, with Paystack’s acquisition by Stripe and Flutterwave’s unicorn status giving credence to the Nigerian startup space.

Three of the top five rounds in Q1 were by financial providers, while they also accounted for 11 of the total 18 deals.

uLesson raised $7m in the quarter, more than what had been raised in the sector between 2018 and 2020. Nigeria’s fintech raised more than $600m in funding between 2014 and 2019.

With a population of approximately 200 million, with 40 per cent unbanked, fintech opens the door of opportunity to a large percentage of the country’s population.

Fintech’s adoption is highest in Lagos, and among the educated middleclass. It is expected to change the face of banking in the nation.

Regulation continues to be a bottleneck in the sector. In a webinar organised by nairametrics ‘Fintech Rising’, one of the speakers, Kola Aina, said, “Laws don’t create employment. We can’t mandate our way out of poverty. The challenge is trying to fit innovation into the law. Priorities enabling innovation.”

The representative of the Securities and Exchange Commission, Okey Umeano, said, “The regulator has no interest in stifling innovation. The SEC was a deeper market.”

In a Central Bank of Nigeria December circular on New License Categorisations for the Nigerian Payment Systems (NLC Circular), a fintech company must pay at least N250m to operate within Nigeria.