Africa’s USD 1.19 Bn fund receives USD 26.5 Mn from Nigerian startups

Africa’s USD 1.19 Bn fund receives USD 26.5 Mn from Nigerian startups

Nigeria has been a popular location for venture capital in the recent past. The country added USD 26.5 million to Africa's USD 1.19 billion amassed in the first half of this year.

Major African financial center Lagos has already surpassed Nairobi, Kenya, as Africa's leading startup ecosystem, sources cited.

Tech startup Decagon that combines lending, training, and job placement to assist skilled individuals to start careers as software engineers, has reportedly raised USD 1.5 million in preliminary funding from early-stage VCs. The company has also secured a student loan financing facility worth USD 25 million from Sterling Bank.

Decagon, which operates at the intersection of edtech, fintech, and the future of work, has received funding from early-stage investors such as Timon Capital and Kepple Africa Ventures. The round also saw participation from angel investors like Paul Kokoricha, Partner at African Capital Alliance, and Tokyo-based United Inc. that runs a tech training firm in Japan.

Decagon founder Chika Nwobi mentioned the firm intends to solve the global underrepresentation of black people in tech, beginning with Nigeria, the world's most populous black country, where youth unemployment is estimated to be above 50%. Despite local firms receiving considerable funding, there is still a shortage of experienced tech talent, he added.

It is to be noted that African startups accrued USD 1.19 billion in investment, more than that raised in the first half of 2019 and 2020 combined.

Knowledgeable sources cited that start-ups based in one of Africa's 'Big Four', Kenya, Nigeria, South Africa, and Ghana, raised 80% of the fund. Nigeria and South Africa attracted more than half of all funding on the continent (27% and 28%, respectively, USD 300 million+ each).

Notably, Fintech startup Flutterwave led the way with a historic USD 170 million Series C round to become Africa's third payments unicorn. Some of the other major funding was secured by Kuda, Bankly, Termii, Flutterwave, Kwik, and Appzone.

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