It’s not a coincidence that TechCrunch has covered more African startups in the last year than any period in our history. Many of those companies are Nigerian, and when we look at venture capital data, we can see why. The country had an incredible 2021 as the most active venture capital scene in Africa, collecting more than $1.8 billion, or 34% of the $5 billion raised across the continent, according to Partech, a pan-African VC firm that also tracks investments.
The country has posted steady progress in the last three years as the leading African startup market. In 2019, startups based in Nigeria attracted $747 million, or 37% of Africa’s total VC investment. Those numbers decreased to $307 million, or 21% of the continent’s total, the following year, though 2020 was a venture capital year much impacted by outside forces.
Thanks in part to a global boom in venture capital activity last year, Nigeria became the first African country to singlehandedly cross the billion-dollar mark while also collecting bragging rights as the preferred destination for mega-investors like Tiger Global and SoftBank.
Y Combinator is paying attention
The ample optimism in Nigeria’s tech community and belief that better days are ahead are unsurprising, despite questions around investors’ due diligence and the eyebrow-raising valuations of some of the nation’s startups.
Speaking of valuations, no seed-stage company in the country is better priced than those in the Y Combinator club. Yesterday, the accelerator graduated its first startup batch featuring its newly revamped terms. The new “standard deal” at YC now features more capital, and prices for Y Combinator graduates are reportedly greater than ever. (Keep in mind that only 10% of the current Y Combinator batch had monthly revenue of more than $50,000 when they were accepted into the program.)
Apart from revenue thresholds, the accelerator shared another interesting statistic concerning Nigeria. With 18 startups, it is the first African country to have the third-largest representation when categorized by country. That’s a milestone for Nigeria, yes, but also an indication of how quickly the African startup scene has developed in a short period of time.