Nigeria Remains the Biggest Destination for VC Investments in Africa

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Tuesday, June 29, 2021 / 10:00 AM / Ottoabasi Abasiekong for WebTV / Header Image Credit: EcoGraphics


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Nigeria remains the biggest destination for venture capital investments in Africa offshore and onshore. Mr. Adebayo Adewolu a Partner with Trium disclosed during a discussion on opportunities for increasing investments from venture capital firms in Nigeria.

 

Citing a Partech Partners report he said the number of equity rounds in Africa for 2020 increased by 63.6% to 359, and Nigeria accounted for 21% of the deals.

 

In terms of sectors, the Fintech industry attracted the highest investments, followed by Agri-tech, Off-grid solutions, Health-tech, and Logistics.

 

Speaking further on how investors view the country he said despite the socio-economic challenges, Nigeria has a huge population and is a business case for Venture Capital firms with a long-term view of the economy.

 

On what companies in Nigeria must do to attract VC investments, Adebayo highlighted the following points for companies;

  • The need for a winning team mentality and approach
  • Ability to adapt to different market dynamics
  • High value for compliance especially in the area of taxes
  • Bookkeeping and the provision of financial records
  • Structures  

 

He called on founders to put structures in place at the early stages of their enterprises, which is important for scaling.

 

Analyzing what will shape the next round of investments in H2, 2021 in Nigeria, he noted the need for efficient market infrastructure that could remove friction in finance and the real economy. This would involve enabling regulations and a robust identity management system.

 

Explaining the "Trium Customer Experience Model" the Partner said that it was designed to identify the importance of engaging with Limited Partners and Founders who are critical clients in the market.

 

For the Founders" he believed that honest and empathic feedback was important for them especially in the area of raising capital and issues around the market entry.

 

He noted that most "Founders" are emotionally invested and there was the need for them to be properly guided on developments in the VC ecosystem.


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