The top 5 Nigerian startup sector developments of 2020

It was a strong year for the Nigerian startup ecosystem, with its startups and incubators expanding overseas, and getting acquired, and more funding flooding into various sectors.

Here, we take a look at what we think were the five biggest moments from within the Nigerian tech startup ecosystem over the course of the last year.

The biggest Nigerian startup news of the year, and probably the biggest development across the continent from 2020, was the acquisition of FIntech company, Paystack by global payments leader, Stripe in a deal reports said could have been worth more than US$200 million. Launched in January 2016 by Shola Akinlade and Ezra Olubi, Paystack is a payments company that helps businesses in Africa get paid by anyone, anywhere in the world. The startup processes over 50 per cent of all web payments in Nigeria, powering payments for over 60,000 organisations, including FedEx, UPS, MTN, and many others.

The company was in October acquired by Stripe, which led Paystack’s US$8 million funding round back in 2018. Stripe’s payments software is used by customers including Amazon, Google, Shopify and Zoom, and its acquisition of Paystack is the latest move in its international expansion. Paystack will be Stripe’s catalyst for growing internet commerce in Africa, with the Lagos-based startup having plans to expand across the continent, starting with a pilot in South Africa.

Lagos incubator Co-Creation Hub (CcHub) made the top five list last year, after it launched an ambitious pan-African expansion effort, most notably with its acquisition of the Nairobi iHub. It continued to grow in 2020, acquiring another Kenyan entity, e-learning startup eLimu to comprise the hub’s ed-tech arm.

CcHub also recently launched the CcHub Syndicate, an investment vehicle empowering investment firms and high net worth individuals (HNWIs) all over the world to co-invest alongside the hub in the most innovative companies across Sub-Saharan Africa, and launched a host of new programmes.

Payments startup Flutterwave continued to prove itself a fundraising beast, closing a US$35 million Series B funding round from a consortium of strategic investors to support its expansion into new African markets. Flutterwave builds modern payments technology and infrastructure, with its solution enabling banks and merchants to replace multiple payment integrations with one simple API, which enables processing of any form of payment anywhere in Africa.

The startup was already well-backed, raising US$10 million in series A funding in August 2017 and then an extension round in 2018, and in January it secured a US$35 million Series B co-led by Greycroft and eVentures. Flutterwave, which already has an active presence in 10 African countries, including Nigeria, Ghana, Kenya, and South Africa, said it would use the funding to expand across Francophone and North Africa, with new target markets including Morocco, Egypt, Senegal, Ivory Coast, Malawi, and Zambia.

Startup veteran Etop Ikpe, once of DealDey and Cars45, launched his new venture, Autochek, with a bang in September, announcing the acqusition of automotive marketplaces, Cheki Nigeria and Cheki Ghana, previously part of ROAM Africa’s portfolio of leading online marketplaces. Autochek aims to transform the automotive buying and selling experience for African consumers by creating a single marketplace for consumers’ automotive needs, from sourcing and financing to after sales support and warranties.

ROAM Africa, Cheki’s parent company, has transferred ownership and operational control to Autochek of its Nigeria and Ghana brands to Autochek, and all Cheki Nigeria and Cheki Ghana outlets will be rebranded. The auto-tech company followed this up in November by announcing it had a US3.4 million pre-seed funding round to help it grow its operations and develop its platform.

There were major developments in the Nigerian digital banking space over the course of 2020, from players “old” and new. Kuda, which launched in 2016 as lending platform Kudimoney but rebranded in june 2019, is building a pan-African digital challenger bank and has received a banking licence from the Central Bank of Nigeria (CBN). The startup closed a US$19 million seed funding round in November in order to accelerate its growth and keep up with customer demand.

A new startup, Sparkle, which was launched in June by former Diamond Bank CEO and tech entrepreneur Uzoma Dozie with the aim of providing seamless solutions to Nigerian individuals, SMEs and retailers.

The startup, which has also been granted a CBN licence, offers comprehensive support for individuals, including flexible payments, savings and analytics to provide greater freedom, flexibility and control over finances and lifestyle. In September Sparkle partnered Visa in a collaboration that will enable it to issue Visa cards to its users.