What’s Next for Nigeria’s Startups and Africa’s Tech Future?

Over the last two years, Africa’s tech scene has gone through a rough patch. In 2024, startups on the continent raised $2.21 billion in 488 deals, down 22.7 percent from 2023. 

By contrast, the first half of 2025 saw a sharp rebound: African startups secured $1.42 billion, a 78 percent jump from the same period last year, while layoffs fell by 55.7 percent compared to the first half of 2024.

Nigeria’s Startup Landscape

Lagos remains Nigeria’s tech stronghold. It houses 23 of the 28 Nigerian companies named among Africa’s fastest-growing firms in 2025, offering immediate access to a dense market and talent pool. 

Yet chronic power outages, congested roads, and unreliable internet continue to hamper productivity, prompting many skilled professionals to seek work abroad.

Funding Dynamics and Major Rounds

While early-stage funding has been tight, large later-stage rounds have given the ecosystem fresh momentum. In October 2024, Moniepoint became a unicorn by raising $110 million in a Series C round led by global investors, including Google’s Africa Investment Fund. 

Around the same time, South African fintech Tyme Group secured $250 million in a Series D round led by Nubank, underscoring ongoing investor confidence in proven digital finance models.

Government and Private Support Initiatives

To encourage tech growth, Nigeria enacted the Startup Act in late 2022, introducing tax breaks, easier access to grants and loans, and a regulatory sandbox for new solutions. 

Alongside government reforms, private efforts such as Itana City’s $2 million pre-seed raise to build Africa’s first digital free zone are lowering barriers for founders and attracting both local and diaspora entrepreneurs.

Key Sectors Driving Growth

Fintech leads the way, with companies like Moniepoint, PalmPay, and Paga featured among Africa’s fastest-growing firms, reflecting the sector’s dominance in payments, lending, and wealth solutions. 

HealthTech is gaining traction too, as foundations and agencies invest in telemedicine platforms and AI diagnostics to improve access and outcomes. In agriculture, AI-powered precision farming and climate-smart tools help farmers increase yields and adapt to changing weather patterns. 

Digital learning is also on the rise, with platforms such as AltSchool Africa and Afrilearn offering online courses, exam prep, and interactive tools to students across borders. 

Finally, renewable energy and cleantech ventures, from off-grid solar grids to solar-powered cold storage, are drawing growing interest as they tackle both power gaps and food-waste challenges.

Infrastructure, Talent, and Scalability

Persistent infrastructure shortfalls have led many startups to open secondary hubs in cities like Accra, Nairobi, and Johannesburg, where electricity and internet services tend to be more stable and where fresh pools of technical talent are emerging. 

To counteract the local talent drain, incubators, universities, and venture funds are collaborating on training programs for developers, data scientists, and cybersecurity experts, aiming to build a stronger pipeline of skilled workers.

Looking Ahead: Merger, Acquisition, and Pan-African Expansion

As funding returns, analysts expect mergers and acquisitions to accelerate, with startups consolidating to gain scale and operational efficiency.

At the same time, the African Continental Free Trade Area, covering 54 countries and operational since 2021, offers a clear framework for cross-border growth by cutting tariffs and harmonising trade rules, making it easier for tech firms to serve customers across the continent.

Nigeria’s tech ecosystem stands at a turning point. With landmark funding rounds, supportive policies like the Startup Act, and renewed investor enthusiasm, there is genuine momentum. 

Yet overcoming infrastructure hurdles, retaining talent, and mastering pan-African scale remain urgent tasks. Founders and investors who address these challenges head-on will not only shape Nigeria’s startup future but help drive Africa’s broader digital transformation.