Nigerian Startup

Nigerian startups raise more money in a single month than whole of 2020

In a month tech investors decided to open their investment wallets in an unusual manner, five Nigerian startups have found themselves $202 million richer. It is the most investment in a single month since 2019 and beats the whole money raised in 2020.

READ ALSO: Nigeria’s fiscal position remains precarious despite rising oil price

Flutterwave opened the month of March with a $170 million Series C funding that pushed its valuation to over $1 billion; Havenhill Nigeria Limited, a clean energy company raised $4.5 million on the same day as Flutterwave; Kuda Bank followed with $25 million; Termii and Kwik came a day later announcing raising $1.4 million $1.7 million each.

It is the most funding closed in a month since the $200 million investment by Visa in Interswitch. Although Paystack pulled in $200 in the deal with Stripe in October 2020, it is an outright acquisition and so does not count as funding.

The $202 million funding is even more impressive as it eclipses the record of the entire investment in 2020 when about 82 Nigerian startups could only haul in $170 million. According to a report compiled by StartupLists, venture capital investments in Africa took off on a high note in the first three months of 2020 only to be blindsided by the outbreak of the COVID-19 pandemic and consequent lockdowns and economic meltdown across the world.

Fear and anxiety left many investors scampering for safety with their funds put on ice until some certainty could be restored. Hence, investments in tech startups were impacted negatively in the second quarter but in the third quarters, investments began to pick up hitting more than 75 percent of the funding raised in previous quarters 2020.

2021 has been significantly different. Startups such as uLesson, an education technology company, with $7.5 million kicked off the year, indicating investors may be regaining their confidence and are willing to start writing big cheques again. March is certainly proving the investors are ready to push more money into the hands of Nigerian startups.

One reason experts say is responsible for the rise in funding is growing confidence driven by returns on investment of venture capitalists in the country. Paystack’s acquisition may have sold the idea once again that Nigeria does have the talents and solutions to tackle payment and other developmental challenges in Africa.

This could be responsible for the influx of first-time foreign investors. Quona Capital which led a $3 million investment in Cowrywise in January and the lead investor in Kuda Bank’s $2 million Series A raise, Valar Ventures – founded by Peter Thiel – were investing for the first time in Africa.

The funding in March has almost come at the back of each other. Flutterwave’s $170 million was announced the same day Havenhill Nigeria Limited said it raised $4.5 million from Chapel Hill Denham Nigeria Infrastructure Debt Fund (NIDF), the first listed infrastructure debt fund in Nigeria and Africa. The funding is for the construction of 22 mini-grids being developed by Havenhill Synergy Limited (Havenhill) under the Nigeria Electrification Project.



Mobilizing the workforce, fast-tracking the future – businesses across Emerging Africa are taking on flexible working

The year 2020 has seen tremendous shifts and changes in the way we work. Technology and innovation are creating new opportunities as well as challenges. For more than a decade, we’ve built a culture around the idea that work is outcomes based, not anchored to a specific place or time. While every industry and business are different, a segment of employees have shifted to remote work and businesses have had to rethink their operating models and organisational structures. Flexible working has jumped from being a pipeline goal to being part of our daily grind in a matter of a few months. As we all head to the dining table or study for yet another day ‘in the office’, remote working technologies are being put to the test in a serious way – and all businesses are impacted.

Working from home is not new. The connected office has long been a critical enabler of the modern era’s distributed workforce, bringing productivity and experience boosters. In fact, in many countries in Emerging Africa, like Nigeria, Kenya, Tanzania etc., ICT has played a big role in driving the economy forward through the rapid growth of IT investment. Remote working has been one of the partial solutions to address connectivity challenges, address the needs of millennial workers, as well as encouraging women to be part of the workforce while having flexible careers.

Today, the ability to work remotely is business critical and presents certain challenges for organisations of all sizes. But adapting to the new normal is a collaborative effort, calling for unity between the c-suite, IT departments and third-party technology experts.

The question is: are organizations ready to handle and prepare for a long-term stint of remote working across the entire workforce – and will they rise to evolving needs when it comes to keeping their business successful?

Empowering productivity: While challenging, this is also a massive opportunity for businesses to demonstrate their agility – and for those lacking agility, to prioritise it. There is no doubt that this seismic shift will test both security and infrastructure, but flexible working can boost productivity too. As the workforce settles into their home office, there are considerations that need to be made in terms of security – keeping applications safe in the data centre and protecting end-point data – supporting network traffic and enabling increased flexibility. While each business will experience these to varying degrees, every business should be carefully thinking through their value chain. It’s therefore critical for organisations to support their employees with the right connectivity and tools that are essential to drive productivity and collaboration.

Data must be protected from the end point to the data centre: By increasing the number of devices connected to the network, the challenge will be managing and processing the additional data. To completely overhaul existing current networks is unrealistic for most medium businesses, as this not only takes time but is a drain on resources. Instead, edge computing can help to process data while limiting the impact on the enterprise cloud by only sending selected data. A recent study from the consulting firm, Deloitte, showed an alarming rise in the number of cyber and ransomware attacks against individuals and organisations and is only increasing, now that the home workforce is connecting remotely to their organisations systems. For any business, cyber-attacks can be devastating as the ability to recover is curbed by a lack of resources.

Seamless, scalable remote working solutions: Thanks to software defined workspaces, employees can access the tools and apps they need on any device. This keeps the day-to-day business rolling, ensuring the playing field is levelled in terms of accessibility and updates. As businesses adjust to the all-in working from home demands, they may find that consumption and ‘as-a-service’ solutions on-premise will help – particularly with economics and the short turn-around they have been faced with. For example, “Virtual Desktop Infrastructure” (VDI) provides secure, high-performance access for critical users while the “Hybrid Cloud” can scale data center resources.

In conclusion, every organisation needs to adapt to the changing expectations of the workforce in order to thrive, and ten years out, businesses that successfully achieve digital workplace transformations will be at an advantage over businesses struggling with legacy systems, massive amounts of data and workforces unprepared for change. Ultimately, by empowering remote workforces, organisations can unlock creativity, productivity, increase job satisfaction and most importantly learn to collaborate in new and improved ways – bringing to fruition the next wave of human led, technology-underpinned progress.

by Habib Mahakian 


What start-ups need to attract investors

It is important as a start-up to ask yourself whose money you will use in the process of making your business idea a reality.

Would you fall back on your own nest egg to fund your start-up, this means you have saved up some money over time. It appears not many young entrepreneurs have nest egg to fund their start-up.

Now, will you go the route of debt financing? In other words, will you take out loans and pay them back with interest? This is an option to be considered with great care.

One of the benefits of using your own money is that you retain the profits and all control of your business if it succeeds. Your other option is to seek equity financing from angel investors, venture capitalists and others. In this business model, you owe less money, but you will share the profits with your investors. You are basically trading equity in your company for cash.

Going this route enables you to raise large sums of money for your start-up without going into debt. You will lose a bit of your control, giving your investors a “say” in your company. After all, they do expect a return on their investment. There is a catch.

Intending entrepreneurs brimming with confidence in their business ideas tend to believe all they need to take-off is see capital from venture capitalists. For venture capitalists the story is different because they are aware that nine out every ten start-up fails, they understand that funding is usually not the most important thing to consider when starting a business but structure.

Venture capitalists want clear answers to questions about who the business targets as customers, market size and how the business plans to grow and expand.

David Tele, managing director at Seedstars Academy, a seed capital venture firm at a Career Fair organised by BusinessDay in 2017 said that they evaluate start-ups approaching them for seed capital based on the Content, Process, and Results (CPR) method. The content dimension of the evaluation is data-driven: customer, market size, and projected revenue.

Process entails setting clear specific, measurable, ambitious, and time bound goals. It starts with setting annual goals, broken into monthly goals, then down to weekly and actionable daily goals.

Results comprise outcome from the two preceding phases and the cycle is repeated. Therefore, a start-up needs to do substantial due diligence before it approaches a seed venture capitalist. Below are a few things a start-up must do to attract seed capital.

Have a Business Plan

The first item on your list is to create a business plan. Venture capitalists deem this your most important task because, without a business plan, they are flying blind. You must create a plan that presents your overall business summary and a description of how it will make money.

In addition to your business plan, your investors will appreciate seeing one, three and five year plans. They want to see your goals and strategies for growth. They are looking for your “staying power.”

Conduct Market Research

Your investors want to see your market research. They want validation that the market can sustain your business and that your start-up is viable. This is the “proof” that your business plan is sound and provides you with numbers to back up your claims that your start-up will be successful.

Prepare Financial Models

Venture capitalists and angel investors are smart, and they know how to drill through your materials to the proof that your business can actually make money. Your financial models should include spread sheets of projected costs, acquisitions, sales and revenue, profit margins and growth rates. Bottom line: they want to know when they can start seeing a return on their investment.

Article by Stephen Onyekwelu


Covid-19: Osinbajo, Okonjo-iweala, Kaberuka outline measures to revive the economy, boost SMEs

Yemi Osinbajo, vicepresident of Nigeria, has said the Muhammadu Buhari administration would formulate policies to aid local production of goods, while also creating the requisite environment to aid local industries.

Osinbajo said the administration plans to invest in the housing sector by building 30 million homes for Nigerians in five years, while the labour and raw material would be sourced locally to create jobs and boost local industries.

He stated this on Friday while featuring in a Covid-19 webinar interactive with the theme: ‘Economy sustainability beyond covid-19’.

The interaction was organised by the em manuel chapel methodist Church.

The interaction also featured Ngozi Okonjo- Iweala former finance minister in Nigeria and current chair- Gavi, the Global Vaccine Alliance, and Donald Kaberuka, former president of the African Development Bank (ADB).

Osinbajo further said that the Federal Government was planning to boost the power sector by investing more in renewable energy, liberalising the sector to encourage private investment in whose tariff would be service driven.

Speaking further, Osinbajo added that the liberalism of the power sector had reduced the subsidy regime and saved a huge significant amount of money for the federal government.

According to him, “If we have a cost effective value chain it would make the Gencos and Discos to have their value chain. The critical thing is to make the market based system work.

“NEC has proposed a system where the Gencos can go and negotiate the price with their customer on service. Through this we can reduce the subsidy regime which has consumed money in the country.

“We intend to build 30 million homes in five years it is an opportunity to grow the local industry and develop the housing programme; We thought we can generate jobs, because we intend using local materials, the engineers, architecture would all be source locally and we can give them 20 or 10 houses to build in some states.

Also speaking Donald Kaberuka advised African leaders that providing a relief package for the citizenry to cushion the effect of the covid-19 was crucial than projecting economic growth.

Kaberuka identified policy inconsistency as the reason for retarded growth witnessed in several African countries over the years, while urging Africans to take extra precautionary measures toward safe-guarding the economy and empowering their citizens because the Covid-19 may stay for long.

“This is a crisis like no other, the government has reduced lockdown because people have to survive; what is happening to families matters, providing support for households is more important than saying my country is growing at 7%,” Kaberuka said.

Also speaking , Iweala outlined the achievements of the African Union (AU) in mitigating the virus in the continent, stressing that AU was putting measures in place that make newly discovered vaccines accessible and affordable to every class of persons in the society.

“The lockdown was necessary because of the increasing number of the virus across countries in the continent and it was to tell the people the severity of the infection.

“We don’t want a situation where the vaccine, if it is discovered, is bought off by the rich countries, that is why we are taking measures so that the poor countries can see it,” Iweala said.

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