NIGERIA’S STARTUPS SHAKEOUT: A CLOSER LOOK AT THE CLOSURE OF NIGERIA’S LEADING TECH STARTUPS IN 2023
In the dynamic realm of Nigeria’s tech landscape, where innovation and ambition collide, a gripping chronicle unfolds—a tale of remarkable startups that soared to great heights only to face the daunting descent. This is not just a narrative of rise and fall; it’s an exploration of the intricate forces that challenged Nigeria’s tech startups, leaving an indelible mark on the nation’s entrepreneurial spirit. In this report, we delve into the anatomy of this startup shakeout, examining the forces behind the downfall of these seemingly promising ventures and the crucial lessons to be learned as the dust settles. Prepare to confront the harsh realities of ambition, vulnerability, and the ever-shifting sands of the Nigerian tech landscape. Buckle up, as we dissect the closures of Nigeria’s fallen tech titans, seeking not just answers, but the resilience needed to rebuild on a firmer foundation.
In the sprawling marketplace of Nigerian tech, where once a cacophony of startups echoed with ambition, an eerily hushed silence has descended. Fallen titans, behemoths who dreamt of digital empires, now lie like dormant volcanoes, their fires extinguished by unforeseen tremors. This isn’t just a graveyard of lost ventures; it’s a whispered cautionary tale, a chronicle of ambition cut short in the year 2023.
In 2016, Jumia Food burst onto the Nigerian scene, serving up a feast of convenience with online food delivery. Riding a wave of investor appetite, they gobbled up millions in funding, enough to make any chef drool. With their pockets lined, they dished out delicious growth, connecting hungry Nigerians with restaurants across the country. Their contribution? Injecting spice into the economy, stimulating the restaurant scene, and creating a smorgasbord of delivery jobs. But alas, In 2023, Jumia Food unexpectedly shut down shop, leaving a bitter aftertaste of “what went wrong?” Whether it was a recipe with too many competing ingredients or simply a case of burnt offerings, their closure serves as a cautionary tale in the fast-paced world of Nigerian tech..
Pillow startup is another corpse in the graveyard, after 8 months of accumulating $18 million in her series A funding round, the startup asked it users to withdraw all their funds at the eariliest. Pillow, a crypto investment startup backed by Accel, communicated to its users that it will cease its operations starting July 31, 2023. The decision was attributed to regulatory uncertainties and challenging business conditions. The shutdown follows eight months after the startup secured $18 million in a Series A funding round. In a message shared with users and viewed by Money control, the startup expressed regret, stating, “We inform you with regret that the Pillow team has opted to discontinue our existing services offered through the Pillow app, citing regulatory uncertainties, and will officially conclude operations on July 31.”
Nigerian cryptocurrency platform Vibra, which raised $6 million in venture capital in 2022, has unexpectedly shut down operations as of October 2023. The company cited ongoing market challenges and strategic adjustments as primary reasons for the decision. Vibra, once considered a promising player in the African crypto space, offered a user-friendly app for trading and community engagement. Despite securing significant funding, it ultimately succumbed to the headwinds of the recent crypto downturn and failed to achieve its projected growth.
The Nigerian tech landscape loses another player months after founder Njoku Emmanuel acknowledged their fundraising woes, Lazerpay, a web3 and crypto payment company, folds under financial pressure, despite earlier workforce reductions. Lazerpay, a once-majestic phoenix with shimmering wings woven from ambition and $1.1 million in venture capital, soared toward the sun of revolutionizing digital payments in Nigeria. Investors like Shola Akinlade of Paystack, Nuwa Capital, Voltron Capital, and Nestcoin had fanned its flames with their belief, propelling it into a promising ascent. Yet, the harsh winds of reality proved unforgiving.
Having dreamt of unraveling the secrets of African DNA with $45 million in hand, 54gene’s bold experiment comes to a premature and clouded end. A bright star for African genomics dimmed fast. Founded with high hopes, 54gene spiraled into disarray within four years, marked by a rapid succession of three CEOs including Ene-Obong and Ron Chiarello. Financial woes brought the curtains down in July, leaving a promising venture unfulfilled.
An, the list goes on. Bundle, fuelled by $450,000, dreamt of buy-now-pay-later magic, but their ascent choked on scaling complexities. PayDay, armed with $3 million, aimed to be the salaryman’s loan knight, yet fierce competition and a narrow market proved their undoing. Even Pivo Africa, with $2.6 million in their sails, saw their fintech voyage founder on operational reefs. These fallen stars illuminate the Nigerian tech landscape with stories of grit and market realities.
Yet, amidst the fallen leaves of disappointment, Nigeria tech landscape still strive to recover from losses, picking up from their half-shattered zeal to succeed that was propelled by the massive 2023 startups shakeout as many Nigerians advanced into learning cutting edge technological skills and using it to solve some of the innate problems of Nigeria. Opay, the giant of Fintech that was recently awarded by NITDA is an icon that serve as one of the many lamps of innovation for Nigeria and for many Nigerians techies.
For the Nigerian tech landscape remains fertile, teeming with potential. From these closures, valuable lessons bloom like desert flowers. The need for agile adaptation, data-driven decisions, and laser-focused business models is paramount. Investors must cultivate patience, their eyes discerning between fleeting mirages and sturdy gazelles
The echoes of this shakeout may linger, but they needn’t be a dirge. Let them be a drumbeat of renewal, a call to arms for resilience and innovation. From the ashes of these fallen startups, let a new generation rise, wiser, stronger, and ready to rewrite the destiny of Nigerian tech, one line of code at a time.
