The report identifies talent shortages, funding challenges, and regulatory barriers as key obstacles, emphasizing the importance of strategic partnerships and policy advocacy.
- 51% of surveyed startups struggle to secure funding, with angel investors playing a vital role.
- 30% of founders cite regulatory issues as significant barriers, urging stronger policy engagement.
- One-third of startups rely on strategic partnerships, underscoring collaboration as a critical factor for resilience.
TLP Advisory, the venture law firm headquartered in Lagos, with offices in London and New York marks ten years of operation with the launch of a new report, “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories.” The report provides a comprehensive analysis of Nigeria’s startup landscape, revealing the growth, challenges, and strategic shifts that have defined the ecosystem over the past decade.
Launched in 2014, TLP Advisory has advised over 250 clients in the Nigerian technology and venture ecosystem on transactions ranging from institutional investments, M&A, intellectual property, international expansion strategies and more. TLP was also one of the only two law firms that drafted the landmark 2023 Nigerian Startup Act, which created the legal framework for key regulatory bodies to provide an enabling environment and support to startups in Nigeria.
Having worked on and structured many of the continent’s biggest deals for the fastest-growing technology companies, TLP has been well positioned to collect technical intelligence for the ecosystem over the past decade, as well as source candid insights from technology leaders. A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories also chronicles the growth and evolution of the Nigerian venture ecosystem from its nascent stages in 2014 whilst also paying homage to early investors like Olumide Soyombo’s Leadpath and enablers like the CcHUB and Lagos Angel Network.
Key findings from A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories include
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Funding Struggles Amid Currency Devaluation: While 2021 saw record venture capital investments of USD 3 billion, 51% of startups surveyed cited difficulties in securing funding, primarily due to currency volatility and access to investors. Angel investors have emerged as a crucial funding source during this challenging period.
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Talent & Operational Efficiency: Talent acquisition and retention are among the top challenges for startups, emphasising the need for efficient operations and customer-centric strategies.
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Regulatory Hurdles: 30% of founders cite complex regulatory landscapes as a major hurdle, urging closer collaboration with policymakers, especially under the Nigeria Startup Act.
The report makes recommendations for fostering a more robust startup ecosystem in Nigeria and is now calling for the following:
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Deepening Strategic Partnerships: Expanding collaborative efforts between startups and corporates can unlock new markets and aid regulatory navigation.
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Investing in Talent Development: Addressing skill gaps is crucial for retaining high performers in a competitive landscape.
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Engaging in Policy Development: Proactive participation in policy discussions is essential for creating a supportive business environment.
Odunoluwa Longe, co-founder of TLP Advisory, comments, “Despite the current tough macroeconomic climes, engaging with participants in this project ignited in me renewed hope and optimism for our ecosystem. We embarked on this project as our way of celebrating the ecosystem that made us, and this report reflects both the resilience and the evolution of the Nigerian tech ecosystem. It’s not just about technology; it’s about building a future where founders, investors, and the public sector work together to make Nigeria a leader in innovation and digital solutions. Over the past decade, we’ve witnessed, and have been part of, incredible success stories born from collaboration and adaptability, and we believe the best is yet to come.”
Adenike Adeyemi, Executive Director of FATE Foundation, added “The most unexpected challenge for entrepreneurs in Nigeria has been the unstable and inconsistent regulatory and business environment. Founders here often have to navigate unique complexities, and a supportive policy framework is essential for unlocking their full potential.”
Speaking to the need for proactive policy engagement, Kola Aina of Ventures Platform notes, “The ecosystem must become more deliberate and take the job of engaging in government policy design more seriously, ensuring we shape the policies that govern our industry.”
In addition to quantitative metrics, the report features several compelling qualitative stories from key ecosystem players like Odunayo Eweniyi (Piggyvest), Mayowa Okegbenle (PressOne Africa), Nichole Yembra (The Chrysalis Co), Kola Aina (Ventures Platform), Olumide Soyombo (Voltron Capital), Femi Longe (CcHUB) and Jessica Hope (Wimbart) – many of whom echoed the report’s findings, in terms of identifying challenges as well as reflecting on lessons learned.
Supported by key partners, including Big Cabal Media, Blue Advisory, PressOne Africa, Ventures Platform and Wimbart, today’s report reflects TLP’s commitment to advancing sustainable growth for African startups. Through its legal-tech product, DIYLaw, TLP has also supported over 200,000 businesses, contributing to Nigeria’s economic development.