Starting a business can be exciting, fun, and exhilarating. However, it takes a lot of work to transform an idea into a sustainable business.
Most startups fail because they lack access to the tools to reach their full potential. It could be funding, expertise, access to opportunities, mentors, etc.
This is why successful startups turn to Venture Capital (VC) firms to guide them to actualise their full potential.
If you are a Nigerian entrepreneur and hope to raise funds through VC firms, we’ve created this article for you.
This article will go through 7 of the best Venture Capital firms in Nigeria for 2022.
Before we get into it, let’s better understand the term “Venture Capital”
What is venture capital?
Investopedia defines Venture capital as “a form of private equity and a type of financing that investors provide to startups and small businesses that are believed to have long-term growth potential”.
It takes a lot to transform a viable idea into a sustainable business. This is why investors/VC firms exist to support startups (both in terms of funding and expertise).
VCs are crucial for financing startup businesses that can’t access traditional funding sources.
In return, the VC hopes to get a stake in the company when its growth potentials are actualised.
(In no particular order), these are the top Investor/ VC firms in Nigeria at a glance.
|Name||Year Founded||Notable investments||Number of Exits||Websites|
|Ventures platform||2016||Paystack, Piggyvest, Lemonade finance, Kudi, Tizetti.||www.venturesplatform.com|
|Lagos Angel Network||2012||Trove, Cafe Neo, Big Cabal media, Trueflutter.com,autobox.ng||www.lagosangelnetwork.net|
|Future Africa||2015||Andela, Payhippo, max.ng, buycoins, Eden, 54 Gene, Flutterwave||future.africa|
|Spark Capital Nigeria||2013||Paystack, coin, ogaVenue, Parkable, drinks.ng||two||spark.ng|
|Leadpath Nigeria||2014||Paystack, Piggyvest, TeamApt, PushCV, Mono, and Gloopro||leadpath.com.ng|
|Greenhouse Capital||2014||Helium health, Max.ng, Migo, Now, prepclass.com.ng, Rensource||greenhouse.capital|
|Microtraction||2017||Wallet.ng, Cowrywise, BuyCoins, Bitsika, 54gene, PayDay||microtraction.com|
How Startup Investors/ VC Firms in Nigeria Work
In Nigeria, VC firms are registered as limited partnerships with limited and general partners.
The firm serves as the general partner and is responsible for making investment decisions and working with startups to grow.
However, limited partners are the people and organisations (e.g. pension funds, hedge funds, endowments, etc.) that provide the VC firm with the needed capital to fund startups.
VC firms do not invest their money; instead, they fundraise by convincing limited partners to invest in the firm. This is done with the promise of ROI (usually ten years).
Summarily, while limited partners provide funds, general partners make smart investments, and in turn, return the money (plus profit) to limited partners.
Top 7 Investor/ VC Firms In Nigeria
In no particular order, these are the top 7 VC firms in Nigeria;
Ventures Platform is an early-stage discovery fund that is focused on building the “future of Africa”.
One interesting thing to know about this VC firm is that it does not split its funding into the “angel, seed, and pre-seed” categories. Instead, they provide broad support to startups as early as possible.
Since its founding in 2016, this VC firm has doled out more than $500 million to 60+ investors in 5 African countries.
This VC has been a massive part of improving technology in Africa. They are notable early investors in some of the most compelling tech companies on the continent
Ventures platform invests across various sectors, including; healthcare, financial services, agriculture, education, big data, and internet infrastructure.
Some notable companies under this VC firm’s portfolio include; Printivo, Piggyvest, Paystack (exited), Tizeti, RelianceHMO, ‘Wesabi’, and many more.
Ventures platform also hosts a community of founders under the “Ventures park”. This community focuses on business funding and business growth.
Are you a mission-driven founder building a capital-efficient business?
Does your business democratise prosperity, plug infrastructural gaps, connect underrepresented communities, create efficiencies, solve non-consumption, and improve livelihoods?
Apply to Ventures platform here
Location: Legacy place, Plot 1619 Danmole Street, Off Idejo Street, Victoria Island, Lagos.
Lagos Angel Network (LAN)
Lagos Angel Network is a non-profit organisation set up for organising (early stage) seed funders to invest in startups.
The network runs with a vision to invest in Lagos-based entrepreneurs and early-stage businesses mainly on; agribusiness, fintech, fashion, technology, media, commercial services, to name a few.
LAN has several portfolio companies, including; Trove, Big Cabal Media, Cafe Neo, and Autobox.ng, to name a few.
The network provides startups access to; angel investors, funds, and its dedicated “LAN forum”.
Some of the primary criteria for securing investment with LAN includes;
- Business must be located in Lagos, Abeokuta, or Ibadan
- Must be an early stage and can provide evidence of income
- Must be between two to five years
- Must have a team of not less than 3
Also, through its active investment community, the network has significantly contributed to the emergence of a new breed of promising Nigerian entrepreneurs.
LAN also organises various activities focused on helping startups grow. Some of these include;
- LAN monthly pitch sessions
- LAN masterclasses
- LAN quarterly Dealdey, and
- other LAN partnership/ecosystem events.
Are you are a self-accredited investor looking for investment opportunities? Click here if you want to submit your business plan to the LAN.
Location: 7 Chapel St, Sabo Yaba 101212, Lagos.
The Future Africa
Led by IyinoluwaAboyeji (co-founder of Andela and Flutterwave), future Africa is an early-stage venture fund focused on high-growth African tech startups.
Since 2015, the firm has been doing precisely what its name states; building Africa’s future. They have done this by supporting startups with capital, coaching, and a community.
Future Africa provides value to both investors and startups. Therefore, whether you are looking for funding or seeking to fund tech startups, Future Africa has what you need.
In 2015, through its “future Africa fund”, the VC firm invested $1.5million across 19 growing tech startups.
Since then, future Africa has grown its portfolio to $12m in assets under management. In the last five years, the company has created $1.2billion of company value.
The future Africa has invested in startups such as; Andela, Flutterwave, Jumia, 54gene, Eden, Payhippo, Max.ng, and many more.
To apply for funds, click here.
Are you looking to invest in the future Africa fund? Click here
To be a part of the future Africa Collective; click here
Spark Capital Nigeria
Spark Capital is a global VC firm that invests in tech startups worldwide. The company backs some of the top names in the tech world, from Grammarly to Twitter, discord, coinbase, slack, and many more.
However, in 2013, Jason Njoku and BastainGotter launched Spark Capital Nigeria with an initial investment of $1million to focus on the growing tech ecosystem in Africa.
According to the company website, “Spark capital Nigeria is not a fund or an incubator, but rather a company that builds companies”.
Currently, the company focuses on Lagos, Nigeria, as a gateway to Africa.
Spark Capital Nigeria’s vision is to help international investors leverage Nigeria’s buoyant tech space, therefore building online marketplaces in Africa.
With a focus on sectors such as e-commerce, finance, financial services, edtech, health tech, and ICT, to name a few, the company has been a significant part of the tech boom in Africa.
Some of its portfolio companies include; Drinks.ng, hotels.ng, tolet.com.ng, Paystack, and ogaVenue.
Location: Lagos, Nigeria
Leadpath is a seed capital fund that provides short, medium, and long-term funding to small and medium-sized startups.
With a focus on high-growth technology areas such as software, web, and mobile technologies, Leadpath continues to bridge the gap between startup to market dominance.
Leadpath provides everything from state-of-the-art facilities to HR, accounting, tax, and legal services for portfolio companies.
The average investment from Leadpath can range from between $25,000 to $100,000 for seed investment (with an opportunity for follow-on funding series).
Besides funding, leadpath also provides support in mentorship and creates an enabling environment for startups to thrive.
Some of its portfolio companies include; Paystack, Piggyvest, TeamApt, PushCV, Mono, and Gloopro.
Location: 70 Olonode Street, off Hughes Avenue, Alagomeji, Yaba, Lagos.
Greenhouse capital is the venture capital arm of Venture Garden Group (a holding/tech scale-up company in Nigeria).
With more than a decade of experience building and scaling African startups, Greenhouse capital connects startups, corporates, and investors to drive innovation across Africa.
With 23 investments operational in 6 countries, The VC firm is sub-Saharan Africa’s largest fintech investment fund (by portfolio size).
Greenhouse capital focuses on the following sectors;
Blockchain, EdTech, Enterprise software, Financial services, Fintech, HealthTech, Renewable energy, Software as a Service.
One of the best parts about working with this VC firm is that every deal is tailored towards the specific needs of each startup.
Some of its portfolio companies include; Helium health, max.ng, Migo, Now, Prepclass.com.ng, Rensource, and Schoolable.
In addition, all portfolio companies have access to the Venture Garden group’s ecosystem of innovative technology businesses.
Microtraction is another great source of pre-seed funding for African technology startups.
The team identifies the best early-stage growth-driven tech startups and helps them become successful companies.
Microtraction’s mission is to accelerate Africa’s economic growth by using technology to solve some of the most significant problems on the continent.
With Microtraction, founders can apply for investment all year round, as long as they fit into the investment criteria. This includes;
- Must have validated market demand
- must have at least 2-3 people (with one technical founder)
- The product must solve an apparent problem
- Clear revenue model, and so on.
Some of microtraction’s portfolio companies include; Wallet.ng, Schoolable, Cowrywise, BuyCoins, Riby, 54gene, Sendbox, and many more.
To apply for funding, click here
According to the Harvard Business Review. It is estimated that more than 80% of the money invested by venture capitalists goes into building the infrastructure required to grow the business. (this includes manufacturing, marketing, sales, working capital, and fixed assets)
If these are some of the things your startup needs, then you may need to consider reaching out to one of the VC firms listed (or the many others not on this list).
Thinking of pitching your business to investors as soon as possible? – Click Here To Get Help.