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SoftBank Set to Lead Funding for Nigerian Tech Startups

By Oluchukwu Ikemefuna

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SoftBank Group, a Japanese powerhouse, has invested in some of the most innovative and successful tech companies in the world. From game-changing startups to established industry leaders, SoftBank has an eye for the next big thing. It’s no wonder they’re a force to be reckoned with in the tech world. 

According to Wikipedia SoftBank is an investment management company that specializes in investing in technology companies. These companies offer a diverse range of goods and services to customers operating in various markets and industries, including automation and the internet. The SoftBank Vision Fund, with over $100 billion in capital, is the largest technology-focused venture capital fund in the world. According to industry sources, this company is set to become the largest financier of Nigerian tech startups in 2024.

The group led a $400 million round for OPay, a mobile payment platform, and a $200 million round for Andela, a talent marketplace for software engineers. The group, which has a $100 billion Vision Fund devoted to supporting technology ventures, has already made two significant investments in Nigerian startups in 2023.

One of the sources, who wished to remain anonymous, stated that SoftBank is interested in Nigeria because of its enormous market potential, the country’s rapidly increasing internet penetration, and the emergence of creative solutions to regional issues. Nigeria is Africa’s most populous and economically significant country.

SoftBank is strategically planning to increase its investment in Nigerian startups in 2024. It aims to focus on key sectors such as fintech, e-commerce, health tech, and edtech, which have high potential for growth and scalability. This move is a clear indication of SoftBank’s commitment to the Nigerian market and its determination to capitalize on the lucrative opportunities available.

SoftBank’s Interest in Some Nigerian Tech Companies

SoftBank is closely monitoring some promising startups in the fintech and mobility sectors. These companies have been generating significant funding and investor interest. Kuda, for example, is a digital bank that raised $55 million in Series B funding. TeamApt is a fintech company that offers digital banking solutions to banks and businesses. FairMoney is a credit-led neobank that raised $42 million in Series B funding. Lastly, Moove is a mobility startup that provides drivers with vehicle financing and insurance options. With SoftBank’s backing, these startups could potentially revolutionize the industries they operate in.

In recent years, Nigerian tech startups have gained remarkable recognition from the international investment community, having raised more than $1.6 billion in funding in 2021. However, the investment momentum witnessed a deceleration in 2023 as the global economic conditions and the local challenges of inflation and exchange rate fluctuations impacted the investment landscape.

In spite of the challenging financial climate, Nigerian startups managed to secure a staggering $500 million in funding in 2023. This achievement is even more remarkable when considering that OPay and Andela both achieved unicorn status, with valuations exceeding $1 billion. The Nigerian tech ecosystem has proven to be a fertile ground for innovation and investment, and this is evident in the impressive amount raised by startups in the country. 

As the economy continues to recover, it is expected that the funding momentum will gain steam in 2024, with more investors looking to capitalize on the opportunities presented by the Nigerian tech scene. 

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Abdullahi Kafayat
Abdullahi Kafayat

Abdullahi Kafayat is an enthusiastic writer interested in the tech world. She's a graduate of Obafemi Awolowo University and has a BSc in Chemistry. You can reach her at Kafayatabdullahi17@gmail.com.

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