Africa’s most populous city, Lagos, has emerged as the leader in ecosystem value and early-stage funding.
In a recent report by Startup Genome, the world-leading innovation policy advisory and research firm, it revealed that Lagos ecosystem value and early-stage funding is currently worth $8.43 billion, while Nairobi leads the top five ecosystems by VC funding per capita.
Lagos is reported to be home to about 400 startups, 88 percent of Nigeria’s total. With 24 million residents, the city is Africa’s biggest metropolitan area as well as one of its leading commercial hubs. The city’s ecosystem is dominated by fintech which constitutes 49% of tech companies in the city.
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Total early-stage funding into the Lagos ecosystem from the second half of 2020 to 2022’s year-end was $824 million, a little below the global average of $970 million.
Total venture capital funding was $3.3 bn (below the global average of $6.6bn) and the median Series A round was $15 million (which was more than the global average of $6m).
In terms of the amount raised in funding, Lagos held its place in the range of 51 and 60 in the global emerging startup ecosystem ranking. OPay’s $400 million Series C in August 2021 was the region’s biggest deal, while Flutterwave’s $250 million Series D in February 2022 saw its valuation increase to over $3 billion.”
According to a 2023 report, Lagos is still the only African city ranked in the global top 100 ecosystems, while Nigeria has five cities in the global top 1,000 this year.
As the top city in Western Africa, Lagos expanded its score gap with 2nd ranked Accra from 279.2% to 386.1%.
The Fintech sub-sector in Lagos is ranked 38th in the global ecosystem, followed by the Transportation industry which is ranked 58th globally, while Ecommerce & Retail is ranked 62nd in the world.
The boisterous city is home to dynamic and resilient startups that, despite a challenging macro environment, have continued to lead innovation across many sectors, which includes financial services, health, climate change, and education.
Lagos, fondly called “Centre of Excellence”, has excelled due to key reasons including being the commercial hub, allowing cross-fertilization of skills, needs, and opportunities.
Knowledge transfer in the city is huge as there are many ICT fairs, symposiums, workshops, summer classes, and boot camps where experts can share knowledge with upcoming developers, architects, and would-be start-ups in a friendly, conducive environment.
Lagos, Nigeria’s economic powerhouse, continues to play a significant role in the region’s tech startup landscape. The city’s notable achievements in funding and valuation have earned it a place among the emerging ecosystems.
Its startup ecosystem is further supported by the Nigeria Startup Act, enacted in October 2022, providing a regulatory framework for tech sector growth.
While access to funding has been a challenge in Africa, Lagos has managed to attract investments from local and international investors. Venture capital firms, angel investors, and corporate entities recognized the potential of the Lagos startup ecosystem and were keen to invest in promising startups.
The megacity has the fourth-highest GDP in Africa and houses one of the largest and busiest seaports on the continent.