Nigeria’s tech start-up scene can be said to have made considerable growth, over the years, but this is not without its challenges. Inadequate infrastructure, lack of broadband internet and unreliable power supply, limits the growth of tech companies, thereby, forcing a number of start-ups to outsource software development, to other parts of the world.
While several initiatives have focused on training software developers, it is not enough, especially, when they form their own businesses. Capital, is another key thing that, start-ups need, but it is, also, limited. With the increasing number of tech entrepreneurs, there are growing numbers of seed funds, providing capital to start-ups.
The results of these types of activities, is an increasing and omnibus pipeline of investible companies, for providers of capital. The hopes are that, in the longer term, this would persuade more international investors, to get interested in Nigeria.
I had a chat with Tomi Davies, President, Africa Angel Business Network, and he bared his mind on funding for start-ups in Nigeria and other topics, on Tech Trends on Channels Television.
CFA: What has been the experience, for Nigerian start-ups, accessing funding to run their businesses?
Tomi: Yes, there is a lot of funding, that’s come into Nigeria, first year of this year, (2019), well over $100 million, but what you are going to find, with that funding, is that, it is only going to specific sets of people, a specific type of people. It is not spread. It is culture-treaded, for example, around fintech and agritech, which are two priority areas. Sure, nothing wrong with that, but it is, also, concentrated at the proven, okay, those who are in growth or are scale. It is not addressing the lower down, lower the ladder seed, at the early stage, yet.
Those are two. Third, if you look at professional service firms, they want to charge start-ups, the same thing they are charging corporate. It cannot work and we have very few organizations that are, actually, addressing start-ups specifics. ETF and a few others have done an amazing job, but there is still a lot to do, around government policies and the kind of support systems, that is required, to enable start-ups to thrive, in the Nigerian early stage ecosystem.
CFA: One fundamental aspect of the ecosystem is the technology. Do you think we have enough proprietary solutions for that?
There are a few good examples
Tomi: We don’t and we are unlikely to, simply because, we don’t have the research and development capacity embedded into our university systems, yet and where we do have, the transfer of technology into commercial enterprise is lacking. There are a few good examples in the country, but they are few and far between. What we do need to do is to understand that and start to do two things. The first is to rectify the R & D and make sure that, we are, actually, getting commercial grade technology, being developed, within our university systems.
The second is to understand that, yes, we are a technology application environment and what we are good at, is, actually, ensuring that, we take technology and we create solutions that are unique to our environment. If we buy into that paradigm, then, it means we have to recognise that, the hubs, the innovation hubs and the technology hubs, have a role to play, in helping us encapsulate these technologies, whether it’s Artificial Intelligence, Virtual Reality, Augmented Reality, Internet of Things, or, any of the Robotic drones, for example now, that we are using in agriculture. All of these technologies, need to have homes of excellence, within our hub infrastructure, if we are, really, going to rise to the challenge, of technology, as a solution, to some of the National problems.