It’s no coincidence that Marketingwithanoy has covered more African startups in the past year than any period in our history. Many of those companies are Nigerian, and when we look at venture capital data, we understand why. The country had an incredible 2021 as the most active venture capital scene in Africa, with more than $1.8 billion, or 34% of the $5 billion raised across the continent, according to Partech, a pan-African VC firm that investment follows.
The country has made steady progress over the past three years as the leading African startup market. In 2019, startups in Nigeria attracted $747 million, or 37% of total VC investment in Africa. Those numbers dropped to $307 million the following year, or 21% of the continent’s total, although 2020 was a venture capital year heavily influenced by outside forces.
Thanks in part to a global boom in venture capital activity last year, Nigeria became the first African country to single-handedly cross the $1 billion mark, while also garnering bragging rights as the destination of choice for mega-investors such as Tiger Global and SoftBank.
Y Combinator Attention
The broad optimism in Nigeria’s tech community and belief that better days are ahead is not surprising, despite questions about investor due diligence and the eyebrow-raising valuations of some of the country’s startups.
Speaking of valuations, no early stage company in the country is better priced than the one in the Y Combinator club. Yesterday, the accelerator graduated its first startup batch with its recently updated terms. The new “standard deal” at YC now offers more capital and prices for Y Combinator graduates are reportedly higher than ever. (Note that only 10% of the current Y Combinator batch had monthly sales of over $50,000 when they were accepted into the program.)
Aside from the revenue barriers, the accelerator shared another interesting statistic related to Nigeria. With 18 startups, it is the first African country with the third largest representation, broken down by country. That is a milestone for Nigeria, yes, but also an indication of how quickly the African startup scene has developed in a short time.