The Nigerian Venture Ecosystem: Challenges and Opportunities
In a recent report by TLP Advisory, talent shortages, funding challenges, and regulatory barriers were identified as key obstacles facing startups in Nigeria. The report emphasizes the importance of strategic partnerships and policy advocacy in overcoming these challenges.
- 51% of surveyed startups struggle to secure funding, with angel investors playing a vital role in bridging the gap.
- 30% of founders cite regulatory issues as significant barriers, underscoring the need for stronger policy engagement.
- One-third of startups rely on strategic partnerships, highlighting collaboration as a critical factor for resilience in the ecosystem.
TLP Advisory, a venture law firm based in Lagos with offices in London and New York, recently marked its ten-year anniversary with the launch of a new report titled “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories”. The report provides a comprehensive analysis of Nigeria’s startup landscape, shedding light on the growth, challenges, and strategic shifts that have shaped the ecosystem over the past decade.
Since its establishment in 2014, TLP Advisory has advised over 250 clients in the Nigerian technology and venture ecosystem on various transactions, including institutional investments, M&A, intellectual property, and international expansion strategies. The firm was instrumental in drafting the landmark 2023 Nigerian Startup Act, which created a legal framework to support startups in Nigeria.
The report highlights key findings, including:
- Funding Struggles Amid Currency Devaluation: Despite record venture capital investments in 2021, 51% of startups face challenges in securing funding due to currency volatility and access to investors.
- Talent & Operational Efficiency: Talent acquisition and retention remain top challenges for startups, emphasizing the need for efficient operations and customer-centric strategies.
- Regulatory Hurdles: 30% of founders identify complex regulatory landscapes as a major obstacle, calling for closer collaboration with policymakers under the Nigeria Startup Act.
The report offers recommendations for fostering a more robust startup ecosystem in Nigeria, including:
- Deepening Strategic Partnerships: Collaborative efforts between startups and corporates can unlock new markets and facilitate regulatory navigation.
- Investing in Talent Development: Addressing skill gaps is crucial for retaining high performers in a competitive landscape.
- Engaging in Policy Development: Proactive participation in policy discussions is essential for creating a supportive business environment.
Odunoluwa Longe, co-founder of TLP Advisory, expressed optimism for the Nigerian ecosystem, highlighting the importance of collaboration and adaptability in driving innovation. Adenike Adeyemi of FATE Foundation emphasized the need for a supportive policy framework to unlock the full potential of entrepreneurs in Nigeria.
The report features insights from key ecosystem players and is supported by partners such as Big Cabal Media, Blue Advisory, PressOne Africa, Ventures Platform, and Wimbart. TLP Advisory’s commitment to advancing sustainable growth for African startups, through initiatives like DIYLaw, underscores its contribution to Nigeria’s economic development.
