Nigeria – Not Kenya – to Become Africa’s Next Big Tech Hub?
There’s too much money in Nairobi.
That’s one way to explain why some venture capitalists are setting their sights elsewhere.
Largely off the back of Mpesa, the hugely successful mobile money-transfer system, the Kenyan capital has gained a reputation for technological innovation—and with it an influx of no-strings (or few-strings) development funding that has crowded out some of the private investment searching for tech startups to finance.
Now investors are looking to the other side of the African continent for results. Nigeria, with nearly 200 million people, a growing economy, and no shortage of local problems, stands out as an option. It’s slowly building up a tech sector of its own. The funding circuit is still small: probably no more than 10 companies investing money, says Kresten Buch, founder of the Nairobi tech accelerator 88mph (which has since expanded to South Africa).
Buch recently started working with Chika Nwobi of seed investment firm Level 5 Labs in Lagos, to become the latest investor to enter Nigeria. The pair have teamed up to start 440ng, a tech accelerator that puts between $20,000 and $100,000 into startups and provides a workspace and mentorship. It graduated its first cohort of nine startups this week. (Underscoring the newness of the local tech scene, only two of the nine have founders with prior startup experience.)