Can Nigerian start-ups sustain 2021 gains in 2022?

Nigeria's start-up ecosystem has been on an upward trajectory, with the birth of three unicorns in 2021 and over $248 million in funding attracted in the third quarter of the same year. The country's entrepreneurial space has shown immense potential and promise, ranking 63rd globally, according to a report by Startup Blink. The question on everyone's mind now is, can this momentum be sustained in 2022? Esigie Aguele, CEO of VerifyMe Nigeria, joins CNBC Africa to discuss the future prospects of Nigerian start-ups. Aguele exudes confidence in the continuation of this growth trend, citing Nigeria's position as the largest economy in Africa and its vibrant community of science and technology enthusiasts. With a population of over 200 million people, 150 million of whom are potential market participants, Nigeria presents a vast market ripe for innovation. The country's youthful population and the influx of international corporations seeking engineering talent further solidify its status as a hub for tech advancements. The focus on sectors like FinTech and health care presents lucrative opportunities for start-ups to thrive. Aguele emphasizes the importance of digital identity verification in enabling economic growth, especially in areas like payments, data analysis, and credit lending. With only 70 million people currently financially included in the country, there is significant room for expansion in the digital space. The potential impact on both social empowerment and business revenue is immense. In the FinTech sector, Nigeria's low penetration rates provide a vast untapped market for services like insurance and credit lending. With insurance penetration at a mere 0.3%, the sector represents a billion-dollar opportunity waiting to be harnessed. Similarly, the credit lending space is underdeveloped, with less than 5% of the population having access to proper credit facilities. Aguele envisions a future where these sectors experience substantial growth, contributing to the overall GDP and economic development of the country. Investment in start-ups is another key factor in sustaining the momentum of Nigeria's entrepreneurial ecosystem. Aguele acknowledges the appetite for investment, both from foreign and local venture capitalists. The influx of capital into the start-up scene bodes well for the growth and scalability of these businesses. Collaboration between foreign and local VCs is seen as a catalyst for further expansion, with a focus on understanding the local market and ecosystem to drive impactful investments. While the path ahead looks promising, challenges remain. Aguele highlights the need for regulatory support and a conducive environment that favors start-up growth. The implementation of a start-up bill, aimed at promoting fairness and protecting indigenous ideas, is crucial for creating a supportive framework for entrepreneurial endeavors. Additionally, fostering collaboration between foreign and local investors is vital for sustainable growth and innovation in the Nigerian start-up landscape. As Nigeria continues to position itself as a burgeoning hub for technological innovation and entrepreneurship, the future looks bright for start-ups in the country. With the right support, investment, and regulatory framework in place, Nigerian start-ups are poised to sustain their momentum and drive economic growth in 2022 and beyond.