Nigeria

Growing pains for Nigerian tech start-ups

www.appsafrica.com proud media partner of Mobile West Africa 2014Foreign investment became a lively topic of debate today at Mobile West Africa (#MWA2014), which is being held in Lagos, Nigeria this week.  The debate stemmed from a quote made by Jason Njoku, CEO of Iroko Partners one of Nigeria’s tech success stories that maybe it wasn’t really helping.

 

Rocket landed in Nigeria
Rocket Ventures invested over $100M into Nigeria last year and this is a contentious issue in the Nigerian tech community. Njoku concedes that his company’s growth is largely due to foreign investment however he says Rocket Internet should do more by growing and investing into local startups from the “grassroot” to start an Internet revolution and invest in the smaller guys. “We need to go beyond rhetoric, lots of talk , lots of guys in suits but nothing happening on the ground” he added.  However momentum in the Nigerian start-up space is building with investment companies like 440.ng, the Lagos Angel Network, SPARK.ng and Passion Incubator to help fuel local investment.



A lot of funds will come from VC’s and angel investors, but the problem now is that VC market in Nigeria and West Africa isn’t that big. Dr Ndukwe founder of Openmedia agues “there is a lot of money within Nigeria, and it’s how we convince the local money to invest in the VC structures” which can then help grow Nigerian start-ups.

Talent and education
Some Nigerians do not hold the view that lack of funds is the main problem, Femi Longe founder of the Co-Creation Hub (ccHUB) in Lagos which was founded to help build sustainable local start-ups argues “there is more money looking for investment then there is good ideas and there is a lack of local talent” . Reason for this is he explains that for “every 20 ideas we get it’s always hard to find one that makes sense”. Tomi Davies, CEO TVCLABS, adds that money coming in not being evenly spread as this is an ecosystem that wasn’t around five years ago. Davies adds “we need to be creating 2500+ start-ups a month to cater for growing population and Nigerians have to scale up and man up together” in all industries. Education is a major problem “the education system is broken down, we are not producing the graduates to build these companies we need, so we need to go back and start from the basics”.

Making things easier for local developers
Davies explained “we need to offer an environment in Nigeria where local developers can come and work with all the operators using API” and break down the barrier for small guys with the operators. Local developers need help and assistance to be able to speak to operators and access billing and API’s in a simple and easy way. It can sometimes take a year to get a VAS licence in Nigeria and the NCC is encouraged to make this process easier. Lucas Dada from Etisalat Nigeria feels that local operators can be competitive but “can still work together to put aside a small portion of revenue for a fund towards the start-up ecosystem”.  Enough said, as Jason Njoku said early on today lets “go beyond the rhetoric” and  start to make things happen on the ground.

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