Nigeria’s top 5 startup moments of 2015

Barring last-minute announcements, it is safe to say the curtains have been drawn on the 2015 startup year in Nigeria. Like previous years, the startup ecosystem in Africa’s powerhouse continues to record year-on-year growth and 2015 was not an exception as new products and startups were launched in the outgoing year. There were also several developments in the startup space that got everybody talking for an unusually long duration.

At the outset of 2015, many industry watchers were not sure how the industry would play out considering the fact that it was an election year in Nigeria and the result could impact the tranquility in the ecosystem since anything could happen to the sector if a wrong person had won. But beyond the elections, there were a couple of developments in the outgoing year that stood out and are worthy of mention.

African Internet Group (AIG) shake up and zero data apps

As much as it tried to keep a low profile this year and staying out of bad PR, Rocket Internet-backed AIG was in the news for good and not-so-good reasons. On the positive side, the company was able to get zero data apps for its startups in Nigeria on the MTN network. According to the terms of the partnership, individuals that desire to access the startups through the zero data app would not incur data costs.

This is a big deal because cost of data is still is big issue in Nigeria and many internet visitors are reluctant to spend long hours online in order to prevent incurring additional data costs. But with this offer, a shopper can spend as long as he or she wants online.

MTN and the startups believe the partnership would not only accelerate Internet penetration in Nigeria but would also give customers and sellers the opportunity to access their products and services via the apps.

“The high data costs are a major barrier for entry for consumers into the e-commerce space. We believe that this proposition will enable hard-pressed consumers to shop and engage in our marketplace without having to worry about the cost of data,” said Kaymu MD Sefik Bagdadioglu.

Read more: Everything you need to know about the East African startup landscape [2015/2016 Update]

Nicolas Martin, CEO Jumia Nigeria also believes that the greatest barrier to extending internet mobile access in Africa is the cost of data.

On the other side, AIG’s decision to change the MDs of its companies in Nigeria was a highly significant one even though Ventureburn was the only platform that took notice of the exercise. The Rocket Internet affiliate has completed the replacement of the heads of Kaymu, Jovago, Easy Taxi and Lamudi.

Jovago’s Marek Zmysłowski was replaced with Kushal Dutta, Evangeline Wiles has left Kaymu and has been replaced with Sefik Bagdadioglu, Easy Taxi Nigeria is now headed by Adaora Asala who replaced the co-founder and former MD Bankole Cardoso. Obi Ejimofo is no longer the head of Lamudi Nigeria following his replacement with Akua Nyame-Mensah.

KongaPay

Even though large volumes of sales are recorded daily online in Nigeria, only a small proportion of the total sales are paid for online as cash on delivery is still the preferred means of payment in Nigeria. But this year, June to be specific, major ecommerce platform Konga.com decided to trying something bold and different with its latest product KongaPay.

KongaPay is described as a payment solution that allows users to perform one-click payments on the Konga marketplace, somewhat similar to Amazon’s one-click solution. Every time a customer triggers a transaction, the bank sends a secure authorisation code to the customer’s registered mobile number. Anyone with a bank account and a registered mobile phone number can use KongaPay. This means there is no need to sign up for internet banking.
The growing popularity of KongaPay was observed during the last Black Friday sales on Konga.com with Sim Shagaya, the company’s CEO revealing that more Konga shoppers are choosing to pay via KongaPay than other payment methods.

“More transaction volume flowing through kongapay than other gateways,” Shagaya tweeted.

Customers’ preference of KongaPay may be connected to the extra 5% discount that shoppers receive when they select the payment method.

Multimillion dollar investments in startups

This year, some Nigerian startup companies were able to close multimillion dollar investment deals but an investor that stood out this year is Interswitch, an integrated digital payments and commerce company that facilitates the electronic circulation of money as well as the exchange of value between individuals and organisations on a timely and consistent basis. Through its ePayment Growth Fund, a new US$10-million fund intended to serve as a catalyst for innovation and disruptive business concepts within the African payment industry, Interswitch has invested in a number of local startups with bright potentials.

The beneficiaries so far include Nigeria’s SlimTrader, a turn-key ecommerce solution provider for businesses, which has secured a one million dollar investment from Interswitch, and Jumia Nigeria’s former MD Tunde Kehinde who is the first beneficiary of the fund after he secured US$850 000 in funding from Interswitch for his new venture Africa Courier Express (ACE).

Read more: Africa is the new frontier of impact investing

Still on multimillion dollar investments in Nigerian startups, Jeremy Stoppelman, the co-Founder and CEO of Yelp, has participated in a round of investments by Nigerian person-to-person money transfer company, Paga. In this round, Paga secured US$13-million from renowned international investment firms Adlevo Capital, Omidyar Network, Goodwell West Africa, Acumen Fund, and Capricorn Investment Group.

The Tony Elumelu Entrepreneurship Programme (TEEP)

From 10 to 12 July 2015, 1 000 entrepreneurs from across Africa converged for a two-day bootcamp at the African Leader Development Centre (ALDC), Covenant University, Sango-Otta, Ogun state southwestern Nigeria.

Even though there have been several initiatives to support and empower African startups, none had been in the same way as TEEP. The finalists came from 51 countries in Africa although the five most represented countries are Nigeria (49%), Kenya (16%), Uganda (4%), Ghana (3.6%) and South Africa (3.2%).

The Tony Elumelu Foundation Entrepreneurship Programme (TEEP) is the flagship entrepreneurship programme of the Tony Elumelu Foundation, founded by the entrepreneur, respected investor and philanthropist Tony O. Elumelu. The vision of the programme is to establish the pre-eminent pan-African entrepreneurship programme and create 10,000 startups across Africa within the next 10 years that generate significant employment and wealth.

Prior to the boot camp, the finalists had undergone a 12-week online training programme which started in April 2015.

Metro Africa Express’ TechCrunch Disrupt London feat

Nigerian startups have performed incredibly well at quite a number of international startup events, especially competitions and this year was not an exception with the performance of Metro Africa Express (MAX) at the TechCrunch Disrupt event where it was named runner-up.

MAX is a Nigeria-based last-mile courier as co-founded by Adetayo Bamiduro and Chinedu Azodoha. Customers can use the custom-built API, text messaging, or other platforms to book a courier. The package will then be delivered within three hours. The customer is charged on distance instead of weight, which is the opposite of other logistics companies. The company also offers general same day and next day courier options.

According to Azodoha, one of the reasons ecommerce hasn’t hit the penetration rates of the US and the UK is due to inadequate delivery infrastructure.

Many Nigerians only heard MAX for the first time at TechCrunch Disrupt and it goes to show the pluripotent status of the Nigerian startup ecosystem especially the ability of the entrepreneurs to uniquely innovate.

Seedstars World’s Marcello Schermer perfectly described Nigeria’s ecosystem when he told Ventureburn that what characterises Nigeria is the hustler mentality.

“You see people are incredibly hungry, entrepreneurs are incredibly driven. They are very aggressive in a positive way in building a business but what I think is lacking is a really good support system for the startups,” Schermer said.