Africa: Nigeria’s Lagos State Startup Ecosystem Worth US$2 billion, Most Valuable

 

According to the 2017 Global Startup Ecosystem Report (GSER) released by Startup Genome, the Lagos startup ecosystem is worth US$2 billion, making it the most valuable startup ecosystem on the continent.

The report, based on survey responses from thousands of tech startups around the world, features interesting findings on the Lagos startup ecosystem. They are bulleted below for readability.

  • At 59%, the Lagos ecosystem has the 9th highest rate of founders with undergraduate degrees while 93% of them have a technical background, the 3rd highest rate in the world.
  • At 6%, startups in Lagos have one of the lowest rates of foreign customers, suggesting challenges to Go Global (overall average at 23%). Only 11% plan to Go Global.
  • 14% of startup founders are women (the global average is 16%) while 4% are immigrant founders, with the global average being 19%.
  • US$77.8k is the average amount raised by Lagos early-stage startups (global average is US$252k) and the growth index of early stage funding is 4.2 (5.1 for global average). Experienced VC index is pegged at 5.1, with 7 being the global average.
  • 77% (global average is 72%) of the Software Engineers in the ecosystem are Experienced, with the average salary of Software Engineers being US$14.1k (global average is US$49k).
  • The estimated number of active startups in the ecosystem is pegged at between 400 – 700, with the global average being 1,762.

“In the global comparison, Lagos is one of the weaker performing startup ecosystems to date. It is comparably isolated and inexperienced, but it has low cost engineering talent, who speak great English — assets that could enable them to increase their global integration,” the report stated.

It added, “We anticipate more headlines from Lagos as they work to establish themselves as a hub for startup investment and innovation over the next few years.”

While the Lagos Startup Ecosystem came tops in terms of value, Cape Town got the “largest startup ecosystem on the African continent” status with between 700 – 1,200 active technology startups. Other important findings are bulleted below.

  • One third of startup founders in the city have gained at least two years of prior experience in a fast-growing startup, making them 5% more experienced than the global average.
  • Cape Town’s startup ecosystem is valued at US$172 million.
  • Cape Town startups have one of the lowest utilization rates of startup advisors in the world, with only 0.85 advisors with equity per startup.
  • US$20.2k is the average amount raised by early-stage startups in Cape Town with its growth index pegged at 4.8, and Experienced VC index pegged at 5.3.
  • 17% of startup founders are women while 18% are immigrant founders.
  • The percentage of Experienced Software Engineers in the ecosystem is 76, with the average salary of Software Engineers being US$20.1k. It takes 53 days to hire a software engineer in the city.

Another South African city, Johannesburg, also featured in the report, doing better than Lagos and South African in terms of products its startups are churning out; 27% are offering a product that is the first of its kind globally.

The city’s startup ecosystem is second to Lagos in terms of value (US$1.36 billion), and has more female founders than Lagos and Cape Town at 25 percent. At 67%, the city has the 3rd highest percentage of startups that experienced positive corporate interest and involvement.

To get the other juicy stuffs in the report, click here to download the full version. The report, the third edition, and most comprehensive to date, was produced in partnership with the Global Entrepreneurship Network (GEN), Crunchbase and Orb Intelligence.

Leave a Reply

Your email address will not be published. Required fields are marked *