Private Equity Venture Capital Redefining Startup Funding in Nigeria

A new report by Rome Business School Nigeria has revealed that private equity (PE) and venture capital (VC) are transforming Nigeria’s startup ecosystem, providing over $1 billion in annual funding and positioning the country as Africa’s leading destination for startup investment.

According to the report, Nigeria accounted for 66 percent of West Africa’s private capital deal volume and 52 percent of its total deal value between 2020 and 2024, securing 404 private capital transactions worth $3 billion within the period.

The technology sector remains the top beneficiary, attracting 82 percent of all VC activity, about $2.7 billion with financial services and infrastructure sectors following closely.

Recent notable funding rounds include Moniepoint’s $110 million and Moove Africa’s $100 million investments, underscoring investors’ growing confidence in Nigerian startups. In 2024 alone, Nigeria led the continent in venture capital inflows, attracting about $1.18 billion out of Africa’s $3.6 billion VC total (Disrupt Africa, 2025; African Private Capital Association, 2025). Private equity investments also surged by 322 percent in the first quarter of 2024 (PwC, 2024; Serrari Group, 2024).

The report highlights the technology sector, especially fintech, as the most attractive for PE and VC investors. Fintech firms such as Flutterwave, OPay, Paystack, and Moniepoint have raised hundreds of millions in funding, with Flutterwave and OPay each crossing the billion-dollar valuation mark. Moniepoint’s recent $110 million round, backed by Google, elevated it to “unicorn” status.

Other high-growth areas include edtech, healthtech, agritech, and renewable energy. Healthtech startups attracted over $200 million in 2022, while renewable energy ventures secured about $500 million. Agritech firms, led by ThriveAgric, are also gaining momentum, aiming to expand access to finance for millions of small holder farmers.

Rome Business School Nigeria notes that PE and VC investors are not only providing capital but also strategic mentorship, operational guidance, and market access. These resources, the report says, help startups build stronger governance systems, scalability, and financial transparency, key factors for attracting long-term investment.

“Investors value companies with clear control systems, scalable business models, and strong leadership teams,” the report observed, adding that startups with robust management and transparency are more likely to sustain investor confidence.

Despite the gains, Nigeria’s PE and VC sectors face significant challenges, including foreign exchange volatility, high taxation, and regulatory uncertainty. The country’s 30 percent corporate tax rate and 7.5 percent VAT have further increased business costs. Foreign direct investment declined by 26.7 percent in 2023 amid currency instability and policy inconsistency, while VC deal values dropped by 22 percent year-on-year (African Private Capital Association, 2025).
Infrastructure deficits also persist. Nigeria currently provides about 4,500 megawatts of power, far below its 30,000-megawatt need, forcing many firms to rely on costly diesel power. Energy costs account for roughly 40 percent of business expenditure in several industries, according to the Nigerian Electricity Regulatory Commission (2023).

Despite these hurdles, the outlook for private capital investment in Nigeria remains promising. Economic diversification away from oil, rapid digital adoption, youth-driven innovation, and increased pension fund participation are driving growth. In October 2024, Nigerian pension funds invested over ₦22 trillion (about $13 billion) in private equity, reflecting rising institutional interest.

Available data also show increasing technology adoption: over ₦387 trillion was processed through electronic payments in 2022, while mobile subscriptions exceeded 190 million and internet penetration hit 45 percent by mid-2023 (CBN, 2023; KPMG, 2023).

“Technology is likely the most transformational force affecting the future of PE and VC in Nigeria,” the report noted. “As Nigeria embraces digital innovation and sustainable development, the demand for private capital will continue to rise.”

Private equity and venture capital have also contributed to job creation and economic expansion. PwC (2022) estimates that every $1 million invested in PE or VC-backed firms generates around 40 direct and indirect jobs. In a country with a 38 percent unemployment rate, these investments have provided critical lifelines for young entrepreneurs and small businesses.

“Nigeria remains one of the top receivers of private capital investment in Africa,” the report concluded. “The impact of PE and VC is evident in their contribution to job creation, innovation, and sustainable economic growth.”