Nigeria’s tech ecosystem faced a major setback in 2024, with six local startups among the eleven African companies that shut down, hibernated, or entered administration, according to the Startup Graveyard report. This trend not only underscores the persistent challenges facing Nigerian startups but also paints a broader picture of Africa’s volatile startup landscape.
Who’s Affected?
The Nigerian startups that shut down include:
- ThePeer
- HerRyde
- Chopnownow
- Cova
- BuyCoins Pro
- Quizac
These closures join a list of others across the continent, such as GroIntelligence, CopiaGlobal, RejaReja, and iProcure (all from Kenya), and LetsChat, which operated in multiple countries.
What Went Wrong?
While funding shortages remained the top cause of closures across Africa, the report identifies a new pattern: startups losing product-market fit after expanding into unfamiliar service areas. For instance, JumiaFood and BuyCoins Pro had to retract from newly launched offerings due to poor market reception, opting instead to refocus on their core products.
The report also highlighted how poor infrastructure and regulatory uncertainty continue to hinder growth in Nigeria. Unreliable power supply and shifting policies—such as the Electronic Money Transfer Levy (EMTL) and cybersecurity levies—are stifling innovation, particularly within the fintech space.
A Shrinking Spotlight
Despite being home to one of Africa’s most vibrant startup hubs, Nigeria now faces the reality of diminishing investor confidence. As the venture capital (VC) ecosystem becomes increasingly concentrated in four major markets—Nigeria, Kenya, South Africa, and Egypt—smaller or struggling startups find it difficult to scale without proven profitability or regulatory assurance.
According to Crunchbase, of the more than 1,200 global unicorns, only nine are African—a stark reminder of how far the continent still has to go in terms of startup maturity and investor appeal.
What’s the Way Forward?
The report urges investors to deepen their understanding of Africa’s complex markets and startups to focus more on sustainable, profitable business models. Hasty expansions, inadequate infrastructure, and over-reliance on uncertain funding channels have all proven to be stumbling blocks.
For Nigeria’s tech scene to thrive, it must tackle these fundamental issues head-on—from fostering a more transparent regulatory environment to investing in reliable infrastructure and scalable innovation.
Until then, the tech dream for many startups in the country may remain short-lived.
