Nigeria’s new $618m tech fund

Nigeria has recently launched a $618 million fund aimed at supporting the tech and creative sectors for young investors who find it difficult to raise capital in Africa’s largest economy. The fund, which is targeted at 15 to 35-year-olds, comes at a crucial time when startup-focused lender SVB Financial Group has failed to support startups in Nigeria, leading to local concerns. The failure of SVB Financial Group has affected some startups such as cross-border payments startup, Chipper Cash, which has said that it had $1 million in the bank. Other startups such as Jumia, an e-commerce firm, and Flutterwave, an Africa-focused fintech firm, have no exposure to the bank.

The $618 million fund, known as the Investment in Digital and Creative Enterprises (IDICE), was launched by Vice President Yemi Osinbajo in the Federal Capital Territory, Abuja, according to a statement by the presidency. The African Development Bank will contribute $170 million, Agence Francaise de Developpement will provide $116 million, while the Islamic Development Bank will offer $70 million. The government, through the Bank of Industry Nigeria, will release $45 million, and the private sector has pledged $217 million.

The initiative is part of the government’s efforts to promote innovation and entrepreneurship in the digital tech and creative industries, with a focus on job creation. Speaking at the launch of the fund, Osinbajo emphasized the importance of the IDICE in supporting young entrepreneurs in the country.

Nigeria has the largest number of startups in Africa, particularly in the tech and fintech sectors, which have attracted funding from overseas banks and venture capital firms. However, most startups still struggle to secure funding due to the high demand for collateral by banks, which they cannot provide. The IDICE is expected to address this challenge by providing support to young entrepreneurs who are seeking to create innovative solutions to drive economic growth in the country.