Nigerian startups are facing a tough climate, marked by funding challenges, a shortage of skilled talent, and a complex regulatory environment.
According to a new report by TLP Advisory, these hurdles are forcing many businesses to rethink their strategies for survival and growth in the competitive tech landscape.
The report titled: ‘A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,’ highlights the difficulties faced by Nigerian startups in securing funding, with 51 per cent of those surveyed reporting challenges linked to currency devaluation and limited access to investors. While 2021 was a banner year for venture capital, attracting $3 billion in investments, the current funding climate has been far less favorable.
Despite this, angel investors have emerged as crucial backers during these challenging times, stepping in to fill the gap left by larger investment bodies. Their involvement has been vital in ensuring the continuity of many startups.
In addition to funding issues, talent acquisition remains a significant barrier. The report highlights the fierce competition for skilled workers as a pressing concern, with many startups struggling to retain top talent as this issue is further compounded by the country’s highly competitive labor market, which places added pressure on emerging companies to offer attractive incentives.
Regulatory complexities continue to plague the ecosystem as well. A third of the founders surveyed in the report cited the country’s regulatory framework as one of their top concerns. TLP Advisory advocates for better collaboration between startups and policymakers, especially, under the Nigeria Startup Act, which aims to create a more supportive environment for innovation-driven enterprises.
To build a more resilient ecosystem, the report proposes several strategies, including fostering deeper partnerships between startups and corporates, investing in talent development, and engaging more actively in policy discussions. These approaches are seen as essential for overcoming the challenges that have slowed growth in the sector.
Despite the setbacks, TLP Advisory co-founder Odunoluwa Longe, remains optimistic about the future. “This report reflects the resilience and evolution of the Nigerian tech ecosystem. It’s not just about technology; it’s about creating a future where founders, investors, and the public sector work together to position Nigeria as a leader in innovation and digital solutions,” Longe stated.
While obstacles persist, the ongoing adaptation and resourcefulness of Nigerian startups signal a brighter future for the nation’s tech industry.
