Startup Genome has said Lagos State technology ecosystem worth about $8.4bn as of the end of 2022.
It stated this in the figures released in its report titled, ‘The global startup ecosystem report 2023’. The policy advisory and research organisation noted that this was below the global average of $34.6bn.
Startup Genome explained that its report provided insights into leading startup ecosystems, emerging trends, and key challenges facing entrepreneurs.
According to it, Lagos was home to about 400 startups, 88 per cent of the country’s total. It said, “With 24 million residents, Lagos is Africa’s biggest metropolitan area as well as one of its leading commercial hubs. It’s also an established and fast-growing tech hub, home to more than 400 startups, 88 per cent of Nigeria’s total.
“Total early-stage funding into the ecosystem from the second half of 2020 to 2022’s year-end was $824m, a little below the global average of $970m. Total venture capital funding was $3.3bn (below the global average of $6.6bn) and the median Series A round was $15m (which was more than the global average of $6m).
The firm highlighted that the average software engineer’s salary in Lagos was $9k (which was below the global average of ($46k).
Commenting on the talent base of the city, the firm said, “The median age in Nigeria is 18.1 years and the nation is home to 82 per cent of the continent’s telecom subscribers.
“The Africa Developer Report 2021 from Google and Accenture notes that Nigeria added 5,000 new software developers from 2020 to 2021, for a total of 89,000. Tech talent flocks to Lagos for career opportunities. As a consequence, global firms are increasingly looking to the city to fill their talent gaps.”
Fintechs have the largest spread in the city, with over 90 per cent of Fintechs in the country based in Lagos. Also, they raised 49 per cent of total investment in 2022.
“Nigeria introduced a cashless policy in 2012, and this has only spurred the development of Fintech startups. Over 90 per cent are based in Lagos, with most focused-on lending and payments. Fintechs accounted for 49 per cent of investment in 2022,” the firm added.
Commenting on the Lagos ecosystem, the Executive Director, FATE Foundation, Adenike Adeyemi, said, “Lagos is home to dynamic and resilient startups that, despite a challenging macro environment, continue to lead innovation across many sectors, including financial services, health, climate change, and education. They do so not just within Nigeria but across the continent.”
According to the firm, no sub-Saharan ecosystems made it into the top 30 + runners-up ranking, but it did not mean the region was without significant activity. It noted that Sub-Saharan Africa was up 227 per cent in early-stage funding amount and up 43.8 per cent in early-stage deal count from 2018 to 2022.
Despite the region missing out of the top 30+, Lagos held its place in the 51–60 range of the emerging ecosystems ranking.