A new analysis by policy and advisory research firm Startup Genome has revealed that Lagos is the regional leader in the Sub-Saharan startup ecosystem in terms of ecosystem value and capital raised.
The report claims that the Lagos startup ecosystem was valued at $8.4 billion between the second quarter of 2020 and 2022 utilizing the value of exits and startup valuation with Nairobi and Cape Town close behind, with cumulative startup valuations of $7 billion and $3 billion, respectively.
Additionally, Lagos entrepreneurs received the largest early-stage funding in the region, totaling about $820 million.
According to the survey, Lagos’ placement in the world’s top emerging startup environment was between 51 and 60.
The largest deal in the area was OPay’s $400 million Series C in August 2021, while Flutterwave’s $250 million Series D in February 2022 increased its worth to almost $3 billion.
The report’s findings also indicate that regional Venture Capital financing decreased by 6% between 2021 and 2022.
With 41% of all startup agreements between 2018 and 2022, fintech was the region’s best-performing technology sector. According to reports, Nairobi is the largest fintech hub in the area.
The research also listed Abuja, the capital of Nigeria, as one of the top five rising digital startup ecosystems, along with Kampala, Dar es Salaam, Dakar, and Abidjan.
Its development did not, however, pose a challenge to Lagos’ position as Nigeria’s leading tech hub.
Over 400 tech businesses, or 88% of all startups in Nigeria, are located in Lagos, according to the research.
Fintechs make up 49% of the city’s tech companies, which dominate the Lagos tech sector.
Education tech and property tech are also making significant progress in Nigeria’s overall tech sector, not only in Lagos.
The Startup Act, which provides a legal framework for businesses across the nation in terms of funding, intellectual property, etc., was signed into law by the previous president Buhari in October 2022.
The statute grants qualifying startups a four-year income tax exemption as well as additional tax relief equal to 5% of taxable profits for up to five years.
However, programs like the Lagos State KITE program and other programs go beyond the startup act to support the supremacy of the Lagos tech cluster.
