In recent years, more startup competitions and innovation challenges have emerged to inspire and reward the hard work of many individuals who provide solutions to problems.
In 2022 alone, Nigeria has held events such as the CBN-AFF Hackathon, the Ecobank Fintech Challenge and the NITDA-MassChallenge Bridge to MassChallenge (B2MC) Nigeria and others.
These competitions are a good way for tech entrepreneurs to pitch their ideas, raise funds and secure corporate partnerships, and incubate and accelerate businesses. However, not many entrepreneurs take advantage of these opportunities.
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Although the tech community is growing at a steady pace and its contribution to the economy is equally impressive, the structure of the Nigerian tech ecosystem is yet to find a sure footing within and outside its borders.
The 2021 Global Innovation Index mentioned the Nigerian economy as one of the 5 economies in Sub-Saharan Africa to have performed below expectations for their level of development. As of 2020, the country stood as the hub of tech innovations in Africa with an estimated 3,300 startups, the highest number in Africa. However, this development has not been evenly distributed.
A report by JICA revealed that there are at least 98 hubs/incubators based in Nigeria. The majority of these are found in the Southern region of the country which has a total of 68 hubs/incubators, while Northern Nigeria houses the remaining 30.
While funding has been a major challenge for startups in the country and Africa at large, 2021 saw an improvement in the turn of events.
Data from the Nigerian Startup Funding Report compiled by Techpoint revealed that 2021 marked the first time Nigerian startups raised more than $1 billion in a single year, with a total of $1.096 billion raised that year- an astronomical 62% increase from what was gathered between 2018 and 2020.
The visibility of Nigerian startups to opportunities and investments
Out of the thousands of tech startups domiciled in Nigeria, only over 100 were funded in 2021, and the sector with the largest share of funds was the financial services sector which received 63% of all the funds raised during that year.
Furthermore, there were over 300 investors (individuals and institutions) who participated in funding rounds in 120 announced deals. 11 of those deals were made with local investors, 67 with foreign investors and 42 with both local and foreign investors.
These data show that not enough startups are receiving the funds they need to grow despite the growing interest of investors (especially foreign investors) on the potential presence of the Nigerian tech ecosystem.
The role of startup competitions and hackathons in supporting the tech community
• Visibility: These initiatives are tailored to attend to specific problems at a time, therefore, they help amplify the visibility of startups working in various fields by exposing them to the right crowd of investors and consumers within and outside the country.
• Networking: Not only do startups meet the right audience, but they also get to meet other relevant players within and outside the ecosystem, thereby fostering the right kinds of connections between individuals and businesses that may lead to future partnerships.
• Funding: The most notable benefit of these initiatives is the funding opportunities they provide. Winners stand great chances of winning cash prizes and other financial grants to grow their businesses.
• Mentorship: Most of these initiatives conclude with follow-up mentorship and accelerator programs for entrepreneurs, to ensure that they continue to grow and make positive contributions to the ecosystem.
• Competitiveness: These challenges offer a playing ground for startups to showcase their skills, hence fostering creative thinking and democratizing the ecosystem. This will in the long run inspire more innovations and economic development as time goes on.
As more opportunities are more likely to present themselves over time, there is a need for more startups to participate and showcase their skills as this will not only profit their businesses but the entire ecosystem in general.