The big picture
Every hour, 77 people move to Lagos from other parts of Nigeria. Everything happens in Lagos. It’s the cultural and commercial center of Nigeria, home to the country’s oldest bank and its largest independent film studio. And it’s the hub for the country’s fastest-growing sector: technology.
Lagos is home to Jumia, the continent’s largest e-commerce company. But the city’s most prominent startups are in fintech — perhaps no surprise, given that the task of moving money around is still the most important challenge within Africa. Tech startups in Lagos are international in scope, with access to local funding through a growing venture capital network and a much larger pot of funds available through foreign VCs. Y Combinator, the Silicon Valley-based startup accelerator, held its first and only event in Africa in Lagos in 2016, a sign of the city’s growing influence within global tech circles.
The growth of the tech sector in Lagos almost feels inevitable, a natural extension of just how much the city draws everything into its orbit. The centralized nature of the city has spurred innovation, even as entrepreneurs now bemoan just how concentrated Lagos is.
Big Stat: $663 million
The amount of funding raised by Nigerian startups from venture capital in 2019. Most of the startups that received this funding are based in Lagos.
View from the ground
Alex Onukwue, a technology journalist, said Nigeria has a longer history of local entrepreneurship than other countries in the region. “We had banks in the ’80s, tech companies in the ’90s and early 2000s built wholly by Nigerians,” he told Rest of World.
But not everyone is convinced that Lagos will remain Nigeria’s primary tech hub. Sim Shagaya, founder of e-commerce platform Konga, started his new edtech venture in Jos, about 268 kilometers north of Abuja, the country’s capital. Shagaya said he chose the city to avoid the stress and traffic of Lagos. Adewale Yusuf, founder of technology media outlet TechPoint, told Rest of World that he believes companies should spread out across Nigeria.
“Lagos happened not because it was intentionally planned. It happened out of necessity,” he said. “Next time, it’s going to be deliberately designed. Opportunities should be decentralized.”
Neighborhood spotlight: Yaba
The center of Lagos’s technology industry is Yaba, a colonial-era suburb of the city. Its narrow streets and aging infrastructure might not give the immediate impression of a high-tech hub, but Yaba’s central location is key to its success. It’s nestled close to two universities, the University of Lagos and the Yaba College of Technology, and crucially, unlike much of the country, it has reliable internet access.
Yaba has birthed or served as the headquarters of some of Africa’s most prominent startups in recent years, including Jumia. Central to that success is the Co-Creation Hub (Cc-Hub), an incubator of early stage startups. More than 120 have passed through Cc-Hub since its inception. The many startups that began in the area have given rise to its nickname: “Yabacon Valley.”
The big name: Paystack
The technology industry in Nigeria began in the 1990s, when new companies sprang up to provide payments solutions for users frustrated with the banking system. That legacy continues today with Paystack. Founded in 2015 by Nigerian entrepreneurs Shola Akinlade and Ezra Olubi, the fintech startup was acquired for a reported $200 million last year by U.S. payments giant Stripe. It’s not just the biggest tech acquisition in Nigeria; it’s also a symbol of the rewards on offer for those choosing to make a career in the tech industry.