The Nigeria Sovereign Investment Authority (NSIA) has announced plans to increase its funding for young entrepreneurs after providing $225,000 to 10 startups as part of the NSIA Prize for Innovation (NPI) programme. The award was given to Money Africa, a fintech company that aims to increase financial literacy through technology. The funding, which comes in the form of cash and equity, is aimed at boosting innovation and digitization in Nigeria. National Information Technology Development Agency (NITDA) is also working to kickstart a N100 billion seed fund for startups, which will be managed by NSIA.
The NPI Demo Day showcased ideas from Nigerian entrepreneurs to solve local problems and demonstrated the potential for startups in Nigeria. The MD and CEO of NSIA, Aminu Umar-Sadiq, said the awards had been split into cash and equity, allowing the NSIA to take ownership in the businesses and engage with entrepreneurs beyond providing funding. Venture partners will manage the equity investment on behalf of NSIA, providing value addition, convening power and positioning for exits to investments. The Demo Day highlights the potential for job creation in Nigeria’s digital economy.
Many start-ups in Nigeria fail due to a lack of initial financing, according to NITDA’s Director General Kashifu Abdullah. The Nigeria Startup Act, which was launched in April this year, aims to establish a startup investment Seed Fund. The Act requires a minimum of N10 billion naira per annum, but NITDA is targeting N100 billion to seed at least 1,000 early-stage startups and about 400 late-stage startups, thus creating more than 80,000 jobs in Nigeria.
During the Demo Day, LegitCar Africa won third place and $12,500, while Extension Africa secured second place with an award of $17,500. The fourth place winners were TruQ, Capsa Technology, Apace Technology Solutions, Ya-lo Technologies, Credit-Chek, Vella Finance and Kobopay Technologies, with $5,000 awarded to each company.
The funding programmes by NSIA and NITDA demonstrate a commitment to support young entrepreneurs in Nigeria, and providing both cash and equity funding options is one way to engage more closely with promising startups. By providing more financing and support, this could help foster more innovation and opportunities for job creation in Nigeria’s digital economy.
