By Jeph Ajobaju, Chief Copy Editor
Nigerian tech startups have raised $110 million since January 2019 to diversify and get a foothold in a highly competitive global terrain, with Google, Facebook, and Microsoft helping to increase their capacity to develop original programmes.
The amount is only $68 million less than that raised in all of the funding rounds in 2018.
Children as young as five are also being introduced into tech to raise their interest early in a sector that holds the future in an increasing knowledge-based economy.
‘She Creates’ camp
Women Technology Empowerment Centre (W.TEC), a non-governmental organisation (NGO), plans technology programmes for girls aged between 13 and 17 and children aged between five and 10 to get involved in the digital economy.
The camp is tagged “She Creates,’’ W.TEC Communication Officer, Adeyemi Odutola, explained in Lagos.
“During the ‘She Creates Camp’, the girls will participate in hands-on technology workshops, leadership activities, excursions to technology companies and extra-curricular activities.
“Evaluations of previous camps revealed that over 80 per cent of alumni are interested in pursuing a Science, Engineering, Design and Technology careers.
“They also showed enhanced leadership skills, creativity, problem-solving and communication abilities as a result of attending the camp,’’ he added.
Odutola disclosed that supporters and partners of W.TEC this year are Sage Foundation, Oracle, Laureates College, MainOne Cable, and Swift Networks.
They also include Devamplify, Edufun Technik STEM Hub, Kenneth Dike Memorial eLibrary, Lagos State Ministry of Education, and Kwara State Ministry of Education.
Four non-residential camps – Lagos-Lekki, Lagos-Mainland, Awka-Anambra, Ilorin-Kwara – will be held for girls aged between 13 and 17 who are smart, curious, and interested in digital technology.
The Lagos-Lekki camp runs from July 29 to August 9, the Lagos-Mainland from August 18 to August 31.
The camps in Awka-Anambra and Ilorin-Kwara both hold from August 26 to September.
Early innovators camp
W. TEC also plans an Early Innovators Camp to introduce children aged between five and 10 to computing and science concept.
Odutola said the camp is designed to harness the curiosity of children by introducing them to computing and science concepts through play and exploration.
“It will give children the opportunity to participate in technology workshops and extra-curricular activities.
“The Early Innovators Camp is for both boys and girls aged between five and 10 years, who are smart, curious and interested in digital technology.
“Evaluations made from our previous camps showed that children can have enhanced imaginative and creativity skills, problem-solving and communication abilities by participating in this kind of boot camps.
“We have started accepting applications for the 2019 Early Innovators Technology Camps. The Lagos-Lekki-Non-Residential Camp would run from July 29 to August 9,” he said.
The Early Innovators Camp Lagos-Mainland-Non-Residential Camp will run from August 17 to August 30.
“We implore civic-minded individuals and corporate bodies to sponsor kids to attend the camp,” Odutola pleaded.
Tech hubs scale up operations
Nigerian tech startups raised $110.9 million from local and foreign investors between January and June 2019, according to information obtained from equity and non-equity deals in the tech industry.
Over 30 firms with continental operations got the money in more than 50 funding rounds denominated in naira and dollar to scale up their operations, as reported by Punch.
A report by Techpoint Africa showed that Nigerian tech startups raised $178 million in funding rounds in 2018, making the country the preferred tech investment destination in Africa.
The funding rounds ranged from pre-seed, seed stage, Series A to C, debt financing, grants to angel investment. Most startups used the money to expand into other markets and develop new products.
Here is the breakdown of some of the amount raised between January and June 2019:
January 2019
- Crop2Cash, an agric-tech company, raised $100,000 pre-seed round
- Provider, an AI-powered food delivery firm, received $1,000 pre-seed fund from an angel investor, Rowland Eno.
February 2019
TeamApt, a fintech startup, received $5.5 million Series A fund from a number of investors led by a Nigerian venture capital company, Quantum Capital Partners.
March 2019
- CredPal raised a seed round of $150,000 from Y Combinator.
- Kudi, a digital payment startup, got $5 million Series A investment from a French venture capital, Partech.
- Carbon (former Paylater) got $5 million debt facility from OneFi.
- Middletrust, an escrow service provider, received $5,000 pre-seed investment from an undisclosed source.
- Bitmama, a crypto-fiat exchange company, raised $25,000 pre-seed fund.
- Greenage Technologies received $57,000 seed round from investors led by Genesys.
- Farmcrowdy got $1 million seed investment from Ajayi Solutions and two other investors.
- Schoolable, Wallet.ng, 54gene and Thrive Agric raised $600,000 seed fund each from Y Combinator.
- EazyChange, a transport payment solution firm, got $10,000 at a Hackathon sponsored by Wema Bank.
- BuyCoins received $1.1 million seed fund from an undisclosed source.
April 2019
- Schoolable and Eazyhire raised a total $80,000 seed fund each from Founders Africa Factory.
- Boomplay got $20 million Series A fund from Maison Capital and Seas Capital.
- Jumia Group received $56 million corporate round investment from MasterCard.
- Others that raised funds but did not disclose the value include e-health zone, Space in Africa, Cowrywise, CredPal, Extramile Africa, Social Lender, Riby Finance, Capricorn Digital, Smart Teller, Tora Africa, and SeamlessHR.
May 2019
- Gokada raised $5.3 million Series A round from Rise Capital and three other investors
- Mvxchange, a business-to-business maritime service firm, received $100,000 pre-seed investment from Neon Ventures and two others.
- Rucove, an agric cross-border trade firm, raised $10,000 pre-seed fund from an undisclosed source
- African Delivery Technologies got $230,000 seed fund from two investors.
- Trove, a cryptocurrency startup, raised an undisclosed amount.
June 2019
- PayDay Investor, a fintech firm; Asusu, Fint, Trove, Tsaron, and Ogaranya received a total $50,072 from ARM Labs.
- Anergy raised $9 million Series A round from Breakthrough Energy Ventures and three other investors
- ScholarX raised $100,000 pre-seed fund.
- MDaaS Global received $1.1 million seed round from investors led by Alitheia Capital.
In the first half of the year, six startups – Lara.ng, Vetsark, Treplabs, Gricd, UpNEPA, Cycles – which participated in the FbStart Accelerator programme organised by Facebook, raised a total $400,000.
Experts advocate more local fund sourcing
However, Institute of Software Providers of Nigeria President, Yele Okeremi, has warned against putting too much emphasis on foreign investment.
“Some people believe that these funds are Foreign Direct Investment (FDI) and beneficial to the country, and that would have been a sound argument except for the fact that if you allow too much foreign interest into your economy, then you own nothing at the end of the day,” he said.
“FDI is good and should be encouraged but if we know what we are doing, it should be a fraction of local investment. Startups are better off having the bulk of their capital from local investors than when it is from foreign investors.”
Tomi Davies, African Angel Business Network President, added that funding is still a major challenge for seed stage startups as most investors focus on growth.
Said he: “While we are awash with funding for the growth of startups that have found product-market fit, there is still a shortage of funding for seed stage startups in incubation that are still trying to develop their minimum viable product.
“As they require smaller ticket size investments in addition to more mentoring and advisory, they are still lacking adequate attention in the commercial world.”
To increase local investment in tech startups, Davies advised that the number of local investors be increased by lowering the average investment ticket size.
He said work on this modification has been going on since 2012 and would soon take off with local currency crowdfunding platforms.
“This will, however, need policy support for it to be successful. We need to competitively support our local small capital investors with enabling policies like co-investment funds, first loss and other risk-mitigating policies.
“The opportunities for innovative technology-enabled solutions cut across all industries and are currently limitless.
“From using drones in agriculture and health to using learning bots in education and transport, we are seeing our startups starting to diversify as the likes of Google, Facebook and Microsoft increase their capacity development programmes.
“Government support at the state level is increasing and local investors that understand tech investments are increasing in numbers.”