Lagos has emerged 70th among the top 100 cities with vibrant startup ecosystems.
This is according to the 2024 Startup Index, a global startup research centre that covers over 100 countries. Lagos is one of only two African cities in the global top 100.
Egyptian Capital, Cairo, which ranked 97th is the second African city on the list.
The 2024 Startup Index explained that more Nigerian cities are coming up in terms of startup activities and that helped the country to retain its 64th position in countries ranking seeing a decline in startup funding in 2023. Nigeria is, however, also ranked 4th in Africa.
According to the report, Nigeria has six cities in the global top 1,000, with Kano joining the Index this year. The cities include Lagos, Abuja, Ibadan, Enugu, Port-Harcourt, and Kano.
“Lagos is the strongest startup ecosystem in Nigeria, with a total score of more than 15 times greater than Abuja, the second ranked city, showing strong centralisation. ¬ Lagos excels in the Consumer Goods industry, ranking 1st in Africa for this industry,” the report stated.
The report noted that though Nigeria ranked 4th in Africa in 2023, the country topped the continent’s unicorn charts with companies such as Flutterwave and OPay rapidly expanding regionally.
It added that the country’s public sector is gradually catching on to the massive potential of startups to transform Nigeria’s economy.
Acknowledging the several initiatives in the country targeted at boosting the startup ecosystem, including the Nigeria Startup Act.
“The Nigerian Startup Act aims to empower entrepreneurship in the country through a legal and institutional framework for the development and operations of Nigerian startups. Other initiatives, such as the Startup Nigeria incubator or the Co-Creation Hub, will hopefully continue to foster the entrepreneurial spirit in the country.
“Moreover, other support organizations such as Lagos Angel Network, Growth Capital Fund, Ventures Platform, and Greenhouse Capital provide funding for local startups. Similarly, FATE Foundation, a non-profit organization, offers aspiring and emerging entrepreneurs a platform to launch, develop, and expand their businesses with enterprise training, mentoring, and advisory support,” it added.
StartupBlink also cited the presence of Starlink’s satellite broadband service, as a factor that will greatly improve the country’s internet speed and boost the startup ecosystem.
Recall that of the $15 billion startups funding that entered Africa since 2019, Nigeria accounted for 30 per cent, which amounted to $4.4 billion. Within this period, Kenya got $2.9 billion; South Africa, $2.4 billion and Egypt, $2.3 billion of the $15 billion.
According to Africa: The Big Deal in a report, the most striking is the relative weight of the big four, which attracted 84 per cent of all the start-up funding in Africa since 2019, with Nigeria alone representing 30 per cent of the total.
According to the report, Kenya came second, South Africa third, and Egypt a close fourth. The report noted that the big four is also home to more than three quarters (25 per cent for Nigeria) of all ventures having raised $1 million or more during the period.
Specifically, with emphasis on the big four, in 2021, Nigeria got $1.7 billion; South Africa, $910 million; Egypt, $500 million and Kenya, $420 million.
In 2022, Nigerian startups got $1.2 billion; Kenya, $1.1 billion; Egypt, $800 million and South Africa, $555 million.
The funding, however, went south in 2023 with Kenya getting $800 million; Egypt, $640 million; South Africa, $600 million while Nigeria getting $410 million.
Meanwhile, in the last five years, in terms of over $1 million start-ups, South Africa is slightly ahead of Kenya, noting that things are shifting over time though.
