Over 70% of Nigerian startups and scaleups have experienced funding challenges due to the global crisis
September 9, 2020
-Endeavor collaborates with Stears Data in publishing white paper on future of entrepreneurship in Nigeria
Endeavor, the global high-impact entrepreneurship network, has published a white paper in partnership with leading Nigerian data collection company Stears Data entitled “Protecting Nigeria’s Entrepreneurial Future”. The white paper outlines a number of proposals for Nigeria’s government policymakers and the business community, as local startups and scaleups navigate the repercussions of the global pandemic. These include financial and non-financial support programs, as well as investment opportunities to boost existing funding efforts.
The Nigerian technology startup ecosystem recorded over $700 million in VC funding in 2019. According to the paper, 84% of startups have reported disruptions to their fundraising efforts, with 79% of startups having less than a six month buffer and only 6% have cash runway of 13 – 25 months. Alongside the drastic impact on the local funding environment, startups have experienced significant declines in sales and revenue, disruption of business operations as a result of lockdown and the implementation of strategic staffing decisions by companies. It is now known that Nigeria’s GDP contracted by 6.1% in the second quarter of 2020.
The white paper highlights rapid intervention from policymakers and cashflow support as the most urgent startup needs, closely followed by bespoke interventions, tailored to the high-growth, innovation business model. The need for startups, scaleups and investors to maintain flexibility to operate in ways that promote the growth of the innovation ecosystem, was also addressed as a focal point.
Endeavor is a mission-oriented organisation that is leading the global movement for high-impact entrepreneurship. Endeavor selects, mentors and accelerates the best high-impact entrepreneurs growth and underserved ecosystems, supporting them to scale their companies and drive local and regional economic growth. Its growing local network of 10 high-growth, scaleup companies in Nigeria includes Paga, Kobo360, Carbon, Migo and Flutterwave.
Speaking on the launch of the white paper, Eloho Omame, Managing Director and CEO of Endeavor in Nigeria says, “At Endeavor, we believe firmly that the innovation ecosystem — the transformational startups and scaleups, and their founders, who are building sustainable growth models in Nigeria — are fundamental to economic growth and the fabric of our future economy. This white paper shares our in-house perspective on proactive solutions that can be taken to minimise the negative impact on businesses and the economy and improve its prospects for the long term.”
Findings in the white paper were synthesised using real-time data collection from reports on startups in Nigeria and in other countries. An analysis of proposed mediations and policy measures by the Nigerian government mirrored against comparable responses in other countries worldwide was also done. Data was gathered from impact surveys measuring the severity of the pandemic on 171 startups and scaleups in Nigeria, at different stages of growth in a variety of sectors.
Michael Famoroti, Chief Economist at Stears adds,”The global crisis could already be the definitive economic event of this new decade, and we still have the opportunity to ensure the policy response is of a similar proportion. The white paper recommendations should be the start of a broader conversation about how to get the best out of Nigeria’s innovation ecosystem—naturally, that means figuring about the role that governments should play.”
Omame concludes, “It is paramount that the survival of our startups and scaleups during this economic downturn is prioritised with the implementation of solutions tailored to their specific needs. Our post-crisis recovery as a country depends on it. We hope to see a more united effort from government and policymakers that ultimately benefits startups and scaleups as our economy navigates the road to recovery”.
Established in 1997, Endeavor is a mission-driven, global organization leading the high-impact entrepreneurship movement. Endeavor was founded on the belief that job creation, innovation, and overall prosperity flourish where there is robust support for high-impact entrepreneurs. To date, Endeavor has screened more than 60,000 entrepreneurs and selected more than 2,000 founders leading over 1,200 scale-up companies. Endeavor Entrepreneurs have created over 3 million jobs, generate more than $20 billion in revenue each year, and inspire future generations to innovate, take risks, and build strong entrepreneurship ecosystems in underserved markets. Headquartered in New York City, Endeavor currently operates in nearly 40 growth markets throughout Africa, Asia, Europe, Latin America, the Middle East, and North America.
Endeavor launched its Nigeria office in 2018, to select and support the best founders of companies at
the scaleup stage, who have potential to leverage Endeavor’s global resources, mentors and network to create large-scale wealth and jobs. Endeavor Entrepreneurs are committed to multiplying their impact by reinvesting their time and money to help others in Nigeria’s ecosystem take off. Today, in Nigeria, Endeavor supports 16 Endeavor Entrepreneurs leading 10 companies.
About Stears Data
Stears Data is the data collection, analytics and data access division of Stears, a digital information company. Stears was built to help individuals, development organisations, investors, governments and companies cost-effectively access high-quality information on Africa from anywhere in the world. Stears also owns one of Africa’s most analytical business publications – Stears Business.
Our data solutions include providing clients with access to proprietary demographic and economic data, as well as research and advisory services to extract insight from client data.
Data & Economic Advisory
Stears Data provides perspectives and projections on the economy on behalf of our clients. We do this via analysis of trends, risks, and policies in the economy. Our clients include governments and private organisations whose strategic and investment decision making is significantly affected by what is going on in the broader economy.
Surveys & Data Collection
Stears Data designs customised, ground-level data collection projects including surveys, focus groups, polling and market/economic research. We work directly with customers to generate reports and customer insights that address specific business needs in Nigeria at national, state and local levels.
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