Lagos, Nigeria: Rising Start-Up Star
What’s behind Africa’s most valuable start-up economy?
For Emeka Akano, CEO and co-founder of Jara Mobile, the name of the game is more. His app provides an easy way to pay bills and buy data and airtime for your mobile phone — services that are then sponsored by businesses through coupons, loyalty programs and the like. “In short, we’re trying to give consumers and brands everything and more,” Akano says. “We believe in disrupting the way people are thinking about doing routine bill payments in Africa.”
“In five years, we see the Lagos start-up scene doubling in value.”
Lagos, Nigeria–based Jara takes its name from the local slang word for “extra,” which has etymological roots in the Yoruba language. But “jara” is also symbolic of Lagos’ tech scene. According to Startup Genome’s 2017 Global Startup Ecosystem Report, Lagos’ start-up economy is valued at $2 billion — the most valuable in Africa.
Pent-up demand is one of the big reasons behind the rapid growth, says Alexandra Novitske, principal investment officer for venture capital firm Singularity Investments. “The explosion of mobile penetration rates is resulting in waves of previously inaccessible consumers coming online,” she says. “This provides opportunities to reach underserved markets — and long-ignored customers mean little brand loyalty and a willingness to adopt new technology.”
It’s the perfect environment for entrepreneurship, something that’s part of Lagos’ DNA, says Toro Orero, curator of SpeedUPAfrica, an organization that hosts start-up boot camps. “You can’t stop Lagosians,” he says.
That spirit makes sense, Akano says. “Most of the developers in Lagos are self-taught,” he says. “This goes to show how determined the young minds can be.”
Still, the young start-up scene faces real challenges. Among them: “Electricity,” says Orero, who notes that many companies get their power from diesel generators because of the lack of a reliable energy grid. Other challenges inherent to the region’s rapid tech rise aren’t as immediately obvious. “Because the commercial environment is still in its infancy, the databases of information on customer behavior, buying patterns, et cetera are lacking,” Novitske says. “This is a barrier to companies trying to operate as a first entrant into a market.”
A similar mindset applies to consumers, who, Akano says, are eager but also wary. “Because you’re not a known brand, getting the trust of consumers at the early stages takes a lot of effort,” he says.
Nevertheless, observers like Startup Genome are predicting continued growth for the Lagos tech scene. Nigerian companies are attracting attention from tech accelerators such as Y Combinator, 500 Startups and Techstars. And in 2016, the Chan Zuckerberg Initiative — a fund started by Facebook founder and CEO Mark Zuckerberg and his wife, Dr. Priscilla Chan — raised $24 million for Andela, a Lagos-based start-up that trains engineers for tech jobs.
In keeping with his mantra for “more,” Akano puts a number on the future. “In five years, we see the Lagos start-up scene doubling in value from its current value of $2 billion to the current global median value of $4.1 billion,” he says.
A Closer Look at One Start-up
Q&A: For all the laughs its free digital comics generate, Lagos-based comic book start-up Comic Republic is enjoying some serious success. Access connected with Eduvie Oyaide, Comic Republic’s head of marketing and corporate communications, to get the inside story.
ACCESS: What explains the hit Comic Republic has become?
E.O. The company was created to influence the comic book reading culture in Nigeria and change the narrative of Africa using African stories made by Africans. Comic Republic aims to inspire a movement through stories that motivate people to believe they can influence a positive change if they start from within. The overall objective is to create good quality art and intriguing stories out of Africa, encourage more people to read African superhero comics and showcase our African culture.
ACCESS: How does Comic Republic’s success fit in with the recent explosion of start-ups in Lagos?
E.O. Lagos has open-minded individuals willing to try new things from popcorn in a bag to a pancake mix to a quick delivery from an online store for that last-minute party. The busy life of the average Lagosian has us seeking quick wins — and the business that can provide that effectively will get heavy demands.
Lagos is home to different cultures, different mindsets. It is home to a comic book community, home to a vibrant theater festival, poetry festival, jazz festival, you name it. There is no party like a Lagos party. We bring it! The people here have a vibrancy that is really unique.
As it relates to innovation, I began to notice that in the ’90s, there was a rise in the number of youths eager to move from Nigeria to the diaspora in search of better education platforms. In the 21st century, we are also beginning to witness an influx of Nigerians in the diaspora returning home to start up businesses. These individuals come with vibrant ideas that are real solution providers. Beyond that, living in Lagos can be tough, and the environment just forces you to become a solution provider.
Most people choose Lagos for their businesses because in Lagos, it is easier to find early adopters eager to try new things. Earlier this year, we hosted a comic and gaming convention called Comic Connect Africa, and Lagos turned up.
“In Lagos, it is easier to find early adopters eager to try new things.”
ACCESS: Incredible. Still, challenges must come with being a young start-up scene, right? What are they?
E.O. Contrary to the popular notion that capital is the key challenge, I will say the key challenge facing business in Lagos and in Nigeria generally is infrastructure. A business owner who can provide his own uninterrupted power supply, water supply, building and easy access to supplies is already at a 50 percent possible success rate.
ACCESS: So, what actions are companies and organizations taking to overcome those challenges?
E.O. Got a problem? Lagos teaches you to think of solutions. So, at Comic Republic, we took a strategic decision to invest some of our capital in infrastructure to keep the business running. Some of the key things include 24/7 access to Wi-Fi with no data restrictions for our employees, uninterrupted power supply through inverters and solar panels, and uninterrupted water supply. These were capital-intensive at the onset but have helped to bring our production costs down.
ACCESS: Where do you see the Lagos start-up scene being in 10 years?
E.O. The Lagos start-up scene in 10 years will be a major cash cow. Those who run their businesses will run the place.