Why Nigerian startups are attracting more funding amid decline in FDI —Stephen Osho

The Co-Managing Partner at Commercio Partners, Mr Stephen Osho, has said that startups in Nigeria are getting more funding because of their resilience and the size of the Nigerian market.

Osho stated this on Saturday during a webinar organised by Nairmetrics to unveil its Corporate Dealsbook 2022, which details capital inflows into the various sectors of the economy.

Dogged entrepreneurship: Osho explained that the fact the startups are attracting more funding despite the decline in Foreign Direct Investments into Nigeria is a testament to the resilience of the doggedness of Nigerian entrepreneurs.

According to him, FDI in Nigeria has been declining from 2018 up to 2022 and in that period, startups in Nigeria have been topping the table of fundraising in Africa. Interestingly, startups accounted for 75% of the total deals recorded in 2022 valued at $5.7 billion.

What investors are looking for : Highlighting other factors attracting investors to Nigerian Startups, Osho said:

• “There’s been a decline in the FDI coming to Nigeria from about $6.3 billion in 2018 to circa $1.6 in 2022. But despite that, we’ve seen a lot of investment in terms of seed-stage funding from investors and entrepreneurs in Nigeria.
• “When investors are looking for where to invest, they look at a lot of other parameters, the size of the economy, the people that actually invest there, the business itself, and the management, and all these have shown the doggedness of Nigerian businessmen and corporates entities
• “A lot of investors are really interested in Nigeria because of the size of the economy, we have a population of over 200 million people. Nobody’s going to joke about our size in Africa. So, people want to be here, but at the same time before they eventually come to the market and invest in the business, they have to look at the management; they have to look at the business model and stuff like that. And you have to be sure that actually, the business can scale up and at the same time can give them returns over a period of time.”

He added that all the analysis point to the fact that Nigerian startups and the ecosystem have proven themselves to the investors and that is why they keep coming.