By Joy Odor
Nigeria’s startup ecosystem is witnessing a massive inflow of private capital as investors pour billions into high-growth ventures across technology, finance, and infrastructure sectors, positioning the country as West Africa’s investment powerhouse.
A new report by Rome Business School Nigeria reveals that between 2020 and 2024, Nigeria attracted 404 private capital transactions valued at $3 billion, accounting for 66% of West Africa’s deal volume and 52% of total deal value.
The surge, driven by a blend of private equity (PE) and venture capital (VC), has cemented Nigeria’s leadership in Africa’s startup economy, with Lagos emerging as the continent’s dominant innovation hub.
In 2024, Nigerian startups led Africa in venture capital deals, raising $1.18 billion of the continent’s $3.6 billion in VC investments. Notable transactions included Moniepoint’s $110 million and Moove Africa’s $100 million funding rounds, both of which underlined strong investor appetite for Nigerian innovation.
The report notes that 82% of all venture capital activity in Nigeria was concentrated in the technology sector, which absorbed more than $2.7 billion over the past four years.
Financial services followed closely with 157 deals worth $1.5 billion, while the infrastructure sector drew 42 transactions valued at $562 million.
“Investors are not just bringing capital — they are bringing mentorship, strategic direction, and global market access,” the Rome Business School report stated. “Private equity and venture capital are now critical to Nigeria’s innovation economy.”
Companies such as Flutterwave, Paystack, Opay, Kuda, and PiggyVest continue to dominate the startup funding landscape, collectively attracting hundreds of millions of dollars and earning global recognition.
Flutterwave’s $475 million, OPay’s $400 million, Moniepoint’s $110 million, and Moove Africa’s $100 million rounds represent some of the largest ever recorded in Nigeria’s tech ecosystem.
In 2022 alone, fintech firms secured over $1.2 billion in VC capital, a figure that underscores the growing role of digital finance in driving Nigeria’s post-oil diversification.
According to the report, PE and VC go far beyond funding. They bring strategic discipline, operational expertise, and market linkages that help startups scale sustainably.
“Nigeria’s leading PE-backed firms have outperformed their peers, showing better corporate governance, operational efficiency, and market resilience,” the report noted.
Private equity has also played a key role in reviving distressed companies, providing liquidity and strategic turnaround management that have restored profitability and competitiveness.
Despite the impressive growth trajectory, analysts warn that persistent macroeconomic and regulatory headwinds could dampen investor enthusiasm.
Nigeria’s 30% corporate tax rate, 7.5% VAT, and unpredictable foreign exchange environment remain top concerns for foreign investors.
A 2023 report by the Nigerian Economic Summit Group (NESG) recorded a 26.7% decline in foreign direct investment (FDI), with deal value and volume dropping 22% and 28%, respectively, in 2024 due to currency depreciation and policy uncertainty.
Additionally, poor infrastructure and unreliable electricity supply with just 4,500MW of power available against a national need of 30,000MW continue to raise operational costs for businesses.
“Nigeria’s high cost of energy and policy inconsistency remain major deterrents,” said PwC analysts. “However, investor interest in digital infrastructure and renewable energy signals a long-term vote of confidence.”
Beyond fintech, sectors like agritech, edtech, healthtech, and renewable energy are attracting rising capital inflows.
Healthtech startups raised over $200 million in 2022, while green energy ventures secured $500 million. Agritech firms like ThriveAgric plan to disburse $500 million in loans to 10 million smallholder farmers by 2027.
The report highlights these as the next wave of investment frontiers, combining social impact with strong returns. Private capital is also reshaping Nigeria’s labor market.
According to PwC, every $1 million invested in PE- or VC-backed firms creates up to 40 direct and indirect jobs.
With Nigeria’s unemployment rate hovering at 38%, venture-backed firms have become vital job creators.
“Nigeria remains one of Africa’s top receivers of private capital investment,” the report concludes. “Its contribution to innovation, productivity, and employment is immense.”
Despite the challenges, Nigeria’s private equity and venture capital outlook remains strong.
With over 190 million mobile lines, 45% internet penetration, and a youth-dominated population (60% under 25), the digital economy is expanding rapidly.
Over ₦387 trillion was processed electronically in 2022 — a signal of both digital adoption and investor potential.
“Technology is the most transformative force shaping the future of PE and VC in Nigeria,” the Rome Business School noted. “As the country deepens its digital infrastructure and governance reforms, the demand for private capital will continue to rise.”
Nigeria’s shift from an oil-dependent economy to a knowledge and innovation-driven model is gradually becoming reality and private capital is the fuel powering that transformation.
