SoftBank Group, the Japanese conglomerate that has invested in some of the world’s most successful tech companies, is set to become the biggest financer of Nigerian tech startups in 2024, according to industry sources.
The group, which has a $100 billion Vision Fund dedicated to backing technology ventures, has already made two major investments in Nigerian startups in 2023, leading a $400 million round for OPay, a mobile payment platform, and a $200 million round for Andela, a talent marketplace for software engineers.
SoftBank’s interest in Nigeria, Africa’s largest economy and most populous country, is driven by the huge market potential, the rapid growth of internet penetration, and the emergence of innovative solutions to local problems, said one of the sources, who spoke on condition of anonymity.
The source added that SoftBank is planning to invest in more Nigerian startups in 2024, especially in the fintech, e-commerce, healthtech, and edtech sectors, where it sees strong demand and opportunities for scale.
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Start ups on SoftBank’s Rader
Some of the startups that are on SoftBank’s radar include Kuda, a digital bank that raised $55 million in Series B funding in 2023; TeamApt, a fintech company that provides digital banking solutions to banks and businesses; FairMoney, a credit-led neobank that raised $42 million in Series B funding in 2023; and Moove, a mobility startup that provides vehicle financing and insurance to drivers.
SoftBank is also looking to partner with local investors, such as TLG Capital, Avenir Growth Capital, and Target Global, who have experience and expertise in the Nigerian market, the source said. A spokesperson said that the group is “always looking for great entrepreneurs and companies that are solving big problems and creating value for society”.
Nigerian tech startups attracts attention globally
Nigerian tech startups have attracted significant attention from global investors in recent years, raising over $1.6 billion in funding in 2021. However, 2023 saw a slowdown in funding activity, as the global economic downturn and the local challenges of inflation and exchange rate fluctuations affected the investment climate.
Despite the funding drought, Nigerian startups still raised over $500 million in 2023, with OPay and Andela becoming the first two unicorns – startups valued at over $1 billion – in the country.
Industry experts expect the funding momentum to pick up again in 2024, as the economy recovers and more investors seek to tap into the opportunities in the Nigerian tech ecosystem.
“Nigeria is a very attractive market for tech investors, because it has a large and young population, a growing middle class, and a lot of problems that can be solved by technology,” said Chika Nwobi, the founder and CEO of Decagon, a software engineering training and placement company. “We have seen some amazing innovations and successes from Nigerian startups, and we believe that there is still a lot of untapped potential in the sector.”
Nwobi added that SoftBank’s presence in Nigeria would be a game-changer for the tech ecosystem, as it would bring more capital, expertise, and exposure to the local startups.
“SoftBank is one of the most influential and respected investors in the world, and they have a track record of backing visionary entrepreneurs and companies that are changing the world,” he said. “Having them invest in Nigerian startups would not only provide them with the resources and support they need to grow, but also inspire more entrepreneurs and investors to join the tech space.”
Other notable investors in Nigerian tech space
Some other notable investors in Nigerian tech startups are:
Tiger Global, a US-based hedge fund and investment company that has supported FairMoney, Flutterwave, and TeamApt through co-leading financing rounds.
US-based venture capital firm Valar Ventures has made investments in Kuda Bank and specializes in fintech startups.
Target Global, a European venture capital company has invested in Moove, a mobility business that offers drivers insurance and financing for their vehicles.
TLG Capital: A UK-based private equity firm that invests in high-growth firms in Africa and has supported startups such as Kuda Bank, TeamApt, and FairMoney.
Accion Venture Lab: An American impact investing firm that has made investments in companies including Field Intelligence, Lidya, and Kudi that help early-stage fintech companies in developing nations.