Nigerian tech startups borrowed over $415 million in 10 years – Report 

A report by Briter Bridges, a research and market intelligence firm focusing on emerging economies, has revealed that Nigeria’s tech startups have over $415 million via debt in the last 10 years. 

The report titled “Debt Financing in Africa’s Innovative Ecosystem” disclosed that African startups in general borrowed a total of $2.1 billion between 2014 and 2023. Startups from Kenya got the largest chunk of this debt with over $800 million borrowed through 60 deals. 

The $415 million borrowed by the Nigerian startups came as the second-highest on the continent within the period. According to the report, the amount was borrowed in over 40 deals.  

The big four countries in terms of startups in Africa, Nigeria, Kenya, Egypt, and South Africa accounted for over 75% of the volume of total debt funding by African startups.  

Decline in equity  

The report noted that debt financing in the African startup ecosystem had grown over the last five years due to a decline in equity funding.

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According to the report, from 2019 to H1 2023, debt as a share of the total volume of funding to ventures in Africa increased from 4% to 26%. 

  • “While debt is certainly playing a role in Africa’s startup ecosystem and innovations on the financing side making it more accessible, one of the biggest drivers of debt’s rise in Africa’s startup ecosystems may be the dramatic fall in equity funding, which fell from $2.6bn in 2022 to $1.4bn in 2023. 
  • “Over the past ten years, more than $2bn in disclosed debt funding has been raised by digital, technology-enabled, and green companies in Africa from more than 140 funders for a total of more than 200 deals,” Briter Bridges stated in the report. 

The sectors getting the debt 

According to Briter Bridges, unlike with equity, most of the debt funding is flowing to companies with collateral with nearly 75% of debt funding going to asset-heavy businesses in cleantech, mobility, agriculture, and logistics.

It added that while debt funding to startups in Africa has increased, it has not been equally distributed across sectors. 

  • “Debt has typically flowed to sectors where funding can be collateral against assets or other collateral like loan books. For example, the sectors in which startups have received the most funding are cleantech and fintech. But even within these, there are a handful of products driving it. 
  • Nearly 50% of disclosed debt funding from 2014 to H1 2023 went to cleantech. The majority went to solar home kits and pay-as-you-go products. In fintech, where nearly a quarter of debt funding has gone to asset financing and buy-now-pay-later products. In mobility, it served for electric vehicles, and within agtech, it was used to finance agriculture equipment,” it added. 

The report listed top debt deals within the period including the $200 million raised by Kenyan startup, Mkopa, $130 million raised by Sunking, another Kenyan Startup, and $50 million raised by Nigerian startup, Lumos.  


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