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By Chinelo Obogo
Nigerian startups are contending with major challenges, ranging from funding shortfalls to talent deficits, compounded by regulatory complexities.
The revelation came from a recent report by TLP Advisory, which delved into the dynamics of Nigeria’s tech-driven innovation landscape and presented actionable strategies for cultivating a robust and sustainable ecosystem.
The report, titled “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,” highlights that while 2021 was a milestone year for Nigerian startups; attracting $3 billion in venture capital investments; 51% of surveyed startups are now grappling with funding difficulties. These challenges stem largely from currency devaluation and limited access to investors, threatening the sector’s growth potential.
The report, however, highlighted the critical role of angel investors, who have become a lifeline for startups during this challenging period, bridging the funding gaps left by larger investment institutions.
Additionally, it revealed that Nigerian startups are facing significant difficulties in attracting and retaining top talent, a challenge exacerbated by an intensely competitive labor market.
TLP Advisory in the report noted the importance of efficient operations and customer-focused strategies as key survival mechanisms for these enterprises.
However, complex regulatory frameworks remain a significant obstacle, with 30% of startup founders identifying these challenges as a primary concern.
The report calls for more effective collaboration between policymakers and the startup ecosystem, particularly under the Nigeria Startup Act, which provides a legal framework to support innovation-driven enterprises.
The report outlines several strategies for fostering a robust startup ecosystem, which include: Deepening Strategic Partnerships: Strengthening collaborations between startups and corporates to open new markets and navigate regulatory challenges; Investing in Talent Development: Addressing skill gaps to improve talent acquisition and retention and Engaging in Policy Development: Actively participating in policy discussions to create a supportive regulatory environment for startups.
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Commenting on the report, co-founder of TLP Advisory, Odunoluwa Longe, expressed optimism for the Nigerian tech ecosystem despite the challenges, saying:
“This report reflects both the resilience and evolution of the Nigerian tech ecosystem. It’s not just about technology; it’s about building a future where founders, investors, and the public sector work together to make Nigeria a leader in innovation and digital solutions.”
Executive Director of FATE Foundation, Adenike Adeyemi, highlighted the impact of an unstable regulatory environment:
“Founders here often have to navigate unique complexities, and a supportive policy framework is essential for unlocking their full potential.”
Kola Aina of Ventures Platform emphasized the need for proactive policy engagement, stating:
“The ecosystem must become more deliberate and take the job of engaging in government policy design more seriously, ensuring we shape the policies that govern our industry.”
Launched in 2014, TLP Advisory has advised over 250 clients in the Nigerian technology and venture ecosystem on transactions ranging from institutional investments, M&A, intellectual property, international expansion strategies and more.
TLP was also one of the only two law firms that drafted the landmark 2023 Nigerian Startup Act, which created the legal framework for key regulatory bodies to provide an enabling environment and support to startups in Nigeria.
In addition to its data-driven insights, the TLP Advisory report features stories from prominent ecosystem players, including Odunayo Eweniyi (Piggyvest), Nichole Yembra (The Chrysalis Co), and Olumide Soyombo (Voltron Capital).
These narratives provide a closer look at the challenges and opportunities that define Nigeria’s innovation landscape.
