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Why Lagos Has Become Africa’s Most Attractive Tech Hub For Investors / Aliko Dangote Didn't Become Africa's Richest Businessman By Hard Work / 14 Most Attractive Muslim Female Billionaires (2) (3) (4)
|Why Lagos Has Become Africa’s Most Attractive Tech Hub For Investors by iamprincewill: 8:39pm On Mar 19, 2021|
Last week, a $170 million venture investment in Lagos-based Flutterwave, a payments processing startup, set the Nigerian tech ecosystem alight with excitement and pride. That’s because it is one of the few homegrown startups, with local founders and many early local investors, to earn the coveted unicorn status — a startup with a pre-exit valuation of over $1 billion.
It marks another significant validation of Africa’s budding fintech sector. On paper, five-year-old Flutterwave is already more valuable than all but a couple of Nigeria’s biggest banks.
In 2019, Nigerian startups were backed by more than $600 million in venture capital funding. Africa, as a whole, received an inflow of over $1 billion in the same year, the first time the continent’s startups crossed the threshold.
But early on, it was never clear how investors would recoup their investment in these startups or exit their positions. Options for initial public offerings are limited, given the shallow capital markets in most African cities. For instance, Jumia, the e-commerce company serving 11 African countries, chose the New York Stock Exchange for its billion-dollar listing in 2019. But it is often cited as being a rare successful African startup IPO exit.
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After almost a decade of investment and growth, insiders in the Nigerian tech — and African — startup community have often wondered privately, and in public, where the next significant exit would come from.
Osita Nwoye, an advisor to early-stage startups, told Rest of World that an exit from a startup built by Africans to solve African problems would be a “validation” of the work being done by local founders on the continent’s tech sector over the last decade.
So when news broke last October that U.S. payments giant Stripe would acquire Paystack, a Nigerian payments processor, for more than $200 million, the local ecosystem heartily celebrated one of their own. Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack is based primarily in Lagos, Nigeria’s commercial capital, and serves about 60,000 customers. This was good news for different players within African tech on a “seismic” level, Nwoye said.
“For the first time at scale, it [Paystack] answered the question ‘where are the exits?’” said, Nwoye, who has advised several startups, including Paystack; he held “tiny” shares in the company for his work as an early advisor.
For local tech venture capitalists and investors, the acquisition provided an opportunity for them to show individuals reluctant to invest in technology that they could get handsome rewards if they bet on the nascent tech scene. And for the employees, it “provided validity of tech as a career,” in a country where oil companies are often seen as the gold standard.
Perhaps less measurable but of no less importance is that Paystack’s purchase is being seen as an inspiration, indicating that Africans, too, can build world-class companies worthy of attracting global interest.
|Re: Why Lagos Has Become Africa’s Most Attractive Tech Hub For Investors by andyblinks05: 8:41pm On Mar 19, 2021|
some people will flood this thread by claiming dem develop am…
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