“Lagos is home to dynamic and resilient startups that, despite a challenging macro environment, continue to lead innovation across many sectors, including financial services, health, climate change, and education. They do so not just within Nigeria but across the continent.”
With 24 million residents, Lagos is Africa’s biggest metropolitan area as well as one of its leading commercial hubs. It’s also an established and fast-growing tech hub, home to more than 400 startups, 88% of Nigeria’s total.
The Lagos State Development Plan (LSDP) 2052 aims to maximize the potential of the ecosystem. In 2022, the EU announced an €820 million ($861.9M) investment in Nigeria’s digital transformation. The Lagos State Government’s Knowledge, Innovation, Technology and Entrepreneurship (KITE) project positions Lagos as Nigeria’s innovation hub.
VC fundraising event EkoVention, launched in June 2022, raises funding for promising pre-seed or seed stage startups. In October 2022, the Lagos state government announced the Lagos State Venture Capital fund. In December 2022, female-founded Aruwa Capital successfully closed its first fund, exceeding its $20 million target.Honeywell Group has partnered with the Lagos State Government and Lagos Innovates to help young entrepreneurs develop successful startups. Incubation program Lagos Innovates’ Idea Hub supports early-stage tech ventures, and iHatch is a five-month free intensive business incubation program.
Lagos Startup Week is one of Nigeria’s most influential startup events. Art of Technology Lagos is the largest tech conference in Nigeria. Lagos Tech Fest brings together entrepreneurs, investors, and tech enthusiasts. The Nigeria Cybersecurity Summit gathers cybersecurity experts and ethical hackers. Notable funding news includes procurement platform Vendease’s $40 million Series A in September 2022 and vehicle-financing startup Moove’s $30 million round in December 2022, bringing its total raised to $230 million.
Ecosystem by the Numbers
Nigeria introduced a cashless policy in 2012, and this has only spurred the development of Fintech startups. Over 90% are based in Lagos, with most focused on lending and payments. Fintechs accounted for 49% of investment in 2022. Flutterwave raised a $250 million Series D in February 2022, tripling its valuation to over $3 billion. The unicorn gained financial licenses from the National Bank of Rwanda in early 2023 and plans to expand into MENA after receiving Egyptian licenses.
In October 2022, developer LandWey Investment unveiled Future City, a pilot city in Epe, Isimi Lagos. Isimi Lagos will incorporate TechValley (Orbit 1), a campus with tech and innovation laboratories, a research center, and incubation labs. ARM Labs Techstars Accelerator Program invests in early-stage Proptech companies. Proptech startup SmallSmall raised $3 million in seed funding in October 2022. The same month, rental solution Spleet announced $2.6 million in seed funding.
Lagos is Nigeria’s Edtech hub. Prepclass offers customized learning programs and connects tutors and students through an online platform. Edves provides digital infrastructure for schools across Africa, automating both learning and administration. It raised a total of $1.2 million over five rounds.
Reasons to Move Your Startup to Lagos
The Nigeria Startup Act 2022 provides startups with a four-year exemption from income tax, additional tax relief equal to 5% of taxable profits for up to five years for qualifying startups, an investment tax credit equal to 30% of investments made in qualifying startups, a 35% individual income tax exemption for startup employees for two years and more.
The Lagos State Employment Trust Fund (LSETF) fosters entrepreneurship by improving access to finance and markets and formulating policies designed to improve the business environment in Lagos. LSETF also offers programs to support founders and startups. Lagos State Development Plan (LSDP 2052) promotes Lagos as a top investment destination in Africa. Andela co-founder Iyinoluwa Aboyeji is developing Talent City to create an ideal work environment and community for startups.
Young, Tech-savvy Talent
The median age in Nigeria is 18.1 years and the nation is home to 82% of the continent’s telecom subscribers. The Africa Developer Report 2021 from Google and Accenture notes that Nigeria added 5,000 new software developers from 2020 to 2021, for a total of 89,000. Tech talent flocks to Lagos for career opportunities. As a consequence, global firms are increasingly looking to the city to fill their talent gaps.
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