How to get funding as a Tech Startup in Nigeria

Throughout Africa, technological inventions, tech innovation centers, and tech-related businesses have all increased. African digital start-ups received between $608 million and $1 billion in venture capital in 2016.

The tech industry is receiving funding from venture capitalists (VCs), angel investors, and the government. One of these start-up financing possibilities is Savannah Funds. 

The year 2020 established a new high for African digital startups, with 397 firms getting US$701.5 million in funding. Africa, as investment firms and big financial institutions have learned, is a land filled with opportunities. Despite the continent’s undeveloped physical and digital infrastructure and turbulent markets, the continent’s population increased (by 25% between 2007 and 2016) and continually rising gross domestic product (GDP) provide promise for a bright future. Kenya, South Africa, and Nigeria are already known as hubs for start-up formation.

It can take years to create a large audience, achieve significant growth, and attract investors when it comes to monetizing a software company. You’ll have to examine numerous possibilities if you’re a small software company with no track record and no idea how to monetize your product.

HERE ARE SOME WAYS TO FUND A TECH START-UP IN NIGERIA

 1.  Family

Family and relatives can help you fund your business in addition to the money in your piggy bank, but you must first earn their trust. It may be difficult to collect finances from your family and relatives if they do not believe in your proposal. You should have to fight for their trust, and you should be able to show that your business strategy is viable with the funds you’re asking for. It is very OK to seek assistance from your family and close relatives.

2.  Crowdfunding

Digital solutions aiming at resolving common difficulties have emerged as a result of technological advancements. This may be seen in the rise of crowdfunding sites, which allow entrepreneurs to raise funds from the general public. The practice of proposing a startup’s business idea to potential investors via an internet platform is known as crowdfunding. In exchange for their money, investors may receive stock or a share of interest over a predetermined period. Founders benefit from crowdfunding because they can set the terms of the investment and keep control of their business.

3.  Bootstrapping

Bootstrapping is a method of funding that comprises using your resources to develop a minimum viable product and putting it out into the market as quickly as possible, then refining and upgrading it in response to customer feedback. Rather than wasting time and money on a product you think is ideal just to find out it needs a lot of tweaking, you create a product that your potential buyers want.

Profits from the MVP can then be put back into the product’s development. It’s less expensive and more efficient, and it’s a popular startup technique – look online and you’ll find a plethora of companies extolling the ‘Lean Startup’ lifestyle.

4.  Bank Of Industry(BOI)

It is a financial institution that focuses on the manufacturing small, medium, and large enterprises, excluding cottage industries, receive funds from the Bank of Industry to start a business; new or existing businesses seeking expansion, modernization, or diversification; creditworthy promoters who must contribute at least 25% of the project cost, excluding land; and borrowers whose management cap is less than one year.

You can acquire access to Bank of Industry services in three simple steps;

The First Step: is to write a suitable application letter.

Step 2: Fill out the BOI Questionnaire.

Step 3: Complete the questionnaire and fill out the paperwork.

5.  African Development Foundation (http://www.usadf.gov/)

The United States African Development Foundation provides seed money to African enterprises. The foundation’s technical aid benefits agriculture, energy, and youth-led businesses. They not only provide seeds and financing, but they also provide training and track the progress and growth of businesses. They assist at various stages of the project and provide possibilities for entrepreneurs to be mentored.

6.  Grants Available to Small Businesses

Another way for a Nigerian startup to raise funds is through crowdfunding. Unlike bank loans, business awards do not need payback. Several non-governmental organizations (NGOs) in Nigeria provide funding to entrepreneurs. Some of them include YouWin Connect Nigeria, GroFin Fund, AYEEN Financial Grants, Lagos State Entrepreneurship Trust Fund (LSETF), and Tony Elumelu Entrepreneurship Programme (TEEP).

Nigeria’s ICT industry is booming and growing. E-commerce platforms and other retail-related services are provided by smaller enterprises, whereas healthcare, agricultural, and financial services are provided by larger businesses.

Few enterprises have access to banks or venture capitalists, relying instead on personal and professional relationships. Finally, in the tech field, women are underrepresented. While the Nigerian government has made the IT industry a priority, the business environment as a whole still needs to be strengthened. Both the government and the private sector must work to promote women’s participation in the IT sector.

The tech industry is a significant local source of expertise not only for the adoption of e-government or digital identification but also for boosting the value chains of other businesses (and possibly driving up employment in those areas). The chance of acquiring a US visa will very certainly outweigh the risk of a Nigerian brain drain to the United States, which is a positive thing. IT training is a big plus, as it boosts the supply of IT workers in the area.

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