In terms of funding, this year has been a generally satisfying one for the Nigerian tech ecosystem, as venture capitalists continue to pump money into startups in the country — more than any of its counterparts on the continent.
According to the Africa Tech and Fintech report by Renaissance Capital, Nigerian startups raised $678 million in 107 different deals between January and April this year, accounting for 31% of the total funds raised by African tech companies in the four months, which stood at $2.2 billion.
As of December 1, Nigerian startups have raised over $1.2 billion, according to Africa: The Big Deal, a newsletter that tracks fundraising in the continent. Though this represents a decline compared to the $1.5 billion raised last year, it is a good number, considering the global economic downturn and other issues that led to the decline in venture funding in nearly every region.
This piece looks at the top 5 tech funding announcements that defined the Nigerian tech ecosystem in 2022.
Flutterwave ($250 million)
This year’s biggest round of tech funding in Nigeria — and Africa — was the Series D round of $250 million raised by Nigerian unicorn Flutterwave in February, which brought the company’s valuation to more than $3 billion — making it Africa’s most valuable startup.
The round led by B Capital Group, a US private equity firm, reaffirmed Flutterwave as a valuable top-level company. Some of the world’s most prestigious investors, including Altak Park Capital, Whake Rock Capital, and Lux Capital, amongst others, were the latest supporters in the funding round.
Flutterwave said at the time that the funds would be used to expand and acquire customers by seeking firms to buy or invest in and developing technologies that will enhance the value of its payment processing company.
The company had nurtured these intentions for a while, especially since its significant raise last year, and had already put them into action by purchasing Disha, a floundering Nigerian e-commerce startup, and co-leading a $2.4 million investment in a Francophone Africa payment gateway.
Despite facing regulatory challenges in Kenya over money laundering allegations it had since denied, in September, Flutterwave acquired the Switching and Processing License from the Central Bank of Nigeria (CBN), which is said to be the most valuable license for any fintech company to acquire.
Interswitch ($110 million)
In May, Interswitch, one of Africa’s largest fintech companies, secured a $110 million deal in a joint venture deal with LeapFrog Investments and Tana Africa Capital to increase its presence across Africa with its digital payment services.
The two investors said they would support Interswitch’s next chapter through continued product innovation and growth across the African continent. However, the company didn’t confirm the amount it received from the firms separately.
The investment came almost three years since Interswitch’s last publicly disclosed funding round, when Visa paid $200 million for a 20% stake in the company.
Interswitch, one of Africa’s major electronic payments and infrastructure companies valued at $1 billion, is well-known for its point-of-sale terminals, online consumer payment platforms, Quickteller, and Verve, Africa’s largest domestic debit card scheme, which has issued over 35 million active cards since its launch.
Last November, the company partnered with Interstellar to develop blockchain infrastructure services across Africa, representing the birth of an innovative and collaborative partnership aimed at delivering impact-focused and enterprise-grade blockchain-powered services across the African continent.
Interswitch announced its plan to go public for the first time in 2016. CEO Mitchell Elegbe told TechCrunch in an interview that year that the company would pursue dual-listing on the London and Nigeria stock exchanges. However, the report about the 20-year-old fintech company’s listing on both exchanges was shelved after receiving funding from Visa.
Moove ($105 million)
In March, Moove, the Nigerian mobility fintech and Uber’s largest vehicle supply partner in Europe, the Middle East, and Africa, raised $105 million in new Series A2 financing to scale across its present markets, and move into new markets outside Africa.
Per TechCrunch, the round was led by existing investors Speedinvest, Left Lane Capital and thelatest.ventures (the first two are lead investors from its Series A) — shared between $65 million equity and $40 million debt. New investors such as AfricInvest, MUFG Innovation Partners, Latitude and Kreos Capital also participated.
More recently earlier this month, Moove raised a $30 million investment fund through its first Sukuk issuance, barely a week after the company was reported to have laid off some of its staff. Franklin Templeton Investments (ME) Ltd led the investment round, bringing the total amount the mobility fintech startup has raised so far to over $230 million.
This new investment is intended to help the company achieve its goal of creating and growing the largest EV ride-hailing fleet in the Middle East and North Africa region, beginning in the UAE.
Having expanded into 13 markets this year, the startup says it will use the funds to scale to 2,000 EVs in the UAE over the coming year to enhance the ride-hailing passenger experience in the region, just as it plans to roll out its EV charging app, Moove Charge — which was initially launched in London in August.
TeamApt ($50 million)
In August, Nigerian fintech startup TeamApt raised $50M in a “pre-Series C round”. The amount represented 13.6% of the company’s total funding. Per the CB Insights State of Venture Q3’22 Report, this is the highest amount raised by an African startup in the third quarter of 2022.
According to TechCrunch, the funding round was led by QED Investors, a U.S. fintech-focused venture capital firm. Existing investors from TeamApt’s Series B last year, Novastar Ventures (co-lead), Lightrock, and BII also participated in this round.
TeamApt operates one of Nigeria’s largest business payments and banking platforms and processes a $100 billion annualized run-rate transaction value via its products: Moniepoint — which serves 400,000 small and medium-sized businesses across Nigeria — and Monnify.
Vendease ($30 million)
In September, Vendease, a Y Combinator-backed digital platform allowing African restaurants to buy supplies, access financial services, and power their business operations, secured a Series A equity round of $20 million.
The startup, founded by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, said the investment would be used to consolidate its growth and operations in Nigeria and Ghana and to support its expansion across the continent. It would also be used to develop new solutions and services to drive growth across the food value chain.
The round was co-led by TLcom and Partech, a rare joint investment by two of the biggest Africa-focused funds. It also saw participation from VentureSouq, Hustle fund, Hack VC, GFR Fund, Kube VC, Magic Fund, and Kairos Angels, who returned after participating in the previous round.
Present in 8 cities across Nigeria and Ghana, Vendease has moved more than 400,000 metric tonnes of food through its platform over the last 12 months, helping its users save more than $2,000,000 in procurement costs and more than 10,000 procurement man-hours. Its data has also helped them reduce wastage from overstocking by an additional $485,000.
But in an interesting turn of events, the startup laid off some of its employees last month. Though the number of affected employees varies according to different reports, the company stated that its decision to trim its workforce was meant to address performance-related issues unrelated to the current global economic downturn.