- Private equity (PE) and venture capital (VC) have become major funding models for startups in Nigeria with over $1 billion in startup funding annually.
- Moniepoint’s $110 million and Moove Africa’s $100 million funding rounds were recent significant startup funding.
- Between 2020 and 2024, Nigeria secured 404 private capital transactions totaling US$3 billion, representing 66% of West Africa’s deal volume and 52% of its deal value.
- The technology sector has been the biggest beneficiary of venture capital funding in Nigeria: 82% of venture capital activity.
- Global shift in investment patterns in the last decade has contributed to the surge in private equity and venture capital in Nigeria.
- In Nigeria, the startup structural architecture plays a crucial role in attracting private equity and venture capital investments.
- Private equity and venture capital in Nigeria still face some challenges such as foreign exchange volatility, regulatory uncertainty, and several structural and economic constraints.
- The future outlook for private equity and venture capital in Nigeria points to sustained transformative growth.
Rome Business School Nigeria released a report on Private Equity and Venture Capital in Nigeria. Private equity and venture capital are changing the Nigerian startup ecosystem by filling the funding gap, thereby enabling small existing businesses and early-stage enterprises to secure the needed funds for competitiveness, innovation, and growth. In 2024, Nigeria led Africa in venture capital deals, attracting about $1.18 billion in startup funding, against the continent’s total $3.6 billion Venture Capital investments (Disrupt Africa, 2025; African Private Capital Association, 2025). This growth was driven by significant deals, including Moniepoint’s $110 million and Moove Africa’s $100 million funding rounds. Private equity investments in Nigeria equally surged by 322% in the first quarter of 2024. (PWC, 2024; Serrari Group, 2024).
Between 2020 and 2024, Nigeria secured 404 private capital transactions totaling US$3 billion, representing 66% of West Africa’s deal volume and 52% of its deal value. The average deal size was US$9.7 million. The technology sector has been the biggest beneficiary of venture capital funding in Nigeria: 82% of venture capital activity, amounting to US$2.7 billion, was directed toward this sector between 2020 and 2024. The financial services sector attracted 157 deals worth US$1.5 billion, and another 42 infrastructure deals valued at US$562 million between 2020 and 2023. The available data depicts Nigeria as one of the top destinations for venture capital in Africa for the year 2024, with over 65% of VC deals concentrated in Lagos (Disrupt Africa, 2025; African Private Capital Association, 2025). In October 2024,Nigerian pension funds spent over ₦22 trillion (about $13 billion) on private equity investments (Aneasoronye, 2025), highlighting the country’s growing appeal to both institutional and private capital investors.
However, beyond financial capital, PE and VC provide a range of other resources such as strategic mentoring, operational advice, and market access for existing businesses and early-stage enterprises, thereby promoting overall sustainable business growth. The surge in private equity and venture capital investments in Nigeria has been attributed to the expanding economy driven by digital transformation. Nigeria’s burgeoning market, demographic dynamics and the changing technological space (digital revolution) has led to a shift in investment focus to non-oil areas with high need for PE and VC financing. Nigeria got around 81% of Africa’s total venture capital investment in 2022, with nearly 60% going to fintech; while healthtech attracted over $200 million in financing, with agritech companies trailing behind (Bridge Africa Technologies, 2024; Disrupt Africa, 2025). Similarly, the emergence of impact investing and environmental, social, and governance (ESG) factors is creating new investment patterns.
The report by Rome Business School Nigeria describes strategic partnership and networking, customer acquisition and retention capacity, scalability and growth potential, operational efficiency and financial transparency, and visionary leadership and management systems as key elements of a business architecture that can boost a startup’s investment chances. The success of businesses like Flutterwave, Paystack, Andela, Opay, PiggyVest and Kuda etc. demonstrates the necessity of a formidable structure in attracting capital investment and the rising trust in Nigeria’s startup environment.
“Investors value companies with clear control systems, scalable business models, and strong leadership teams. Therefore, startups that show financial control, managerial efficiency, and openness are more likely to draw investment and keep long-term ties with investors. This supports the need for strong organizational systems to maintain and defend investment relationships,” observed the report.
However, significant regulatory and economic constraints continue to plague the private equity and venture capital investment landscape in Nigeria. Nigeria’s poor infrastructure, regulatory inconsistencies bordering on taxation, foreign investment inflows, and repatriation of capital vis-à-vis volatility of foreign exchange including currency swings and depreciation of the naira have repeatedly deterred international investors who seek stability and predictability in investment settings (Bian, 2021; Ernst & Young, 2024; Control Risks, 2024). Nigeria’s corporation tax rate of 30% is one of the highest in Africa, coupled with the Value Added Tax (VAT) rise to 7.5%, which has further increased running costs for companies, hurting company profits and investment choices. Foreign direct investment inflows declined by 26.7% in 2023 as a consequence of fears about currency volatility and inconsistent regulatory policies in Nigeria (Nigerian Economic Summit Group, 2023). While Nigeria’s VC investments profile improved significantly in 2024, it came amid a 22% year-on-year decline in deal value and a 28% drop in deal volume compared to 2023, highlighting the impact of economic instability and regulatory hurdles (African Private Capital Association, 2025).
According to the Government National Planning (2024), Nigeria needs an expected $3 trillion over the next 30 years in infrastructure spending to address transportation, power, and related challenges. Nigeria provides roughly 4,500 megawatts of power, well below the need of nearly 30,000 megawatts, hence the reliance of mostbusinesses on diesel engines for electricity, raising running costs and weakening profits. The cost of energy alone accounts for approximately 40% of business spending in several industries in Nigeria (Nigerian Electricity Regulatory Commission, 2023). This is further compounded by the problem of insecurity, namely terrorism, banditry and kidnappings that have created an uncertain economic environment.
Nevertheless, looking ahead, the future of private equity and venture capital in Nigeria is set for significant upheaval. Consistent government commitment to economic diversification has seen a gradual shift away from oil dependence to non-oil industries such as technology, agriculture, and manufacturing. This has in turn produced new investment options for PE and VC. Other macroeconomic indices such as the rising informal sector, the continuing bank recapitalization initiatives, the increasing role of pension funds in private equity investments, the surge in cloud technologies and data analytics, mobile and internet penetration, and the burgeoning youth population present a bright prospect for the growth of PE and VC. Available data shows that over ₦387 trillion was processed via electronic payment methods in 2022, driven by greater smartphone access and governmental support of cashless policies, internet usage hit over 45% mid-2023, cell phone use topped 190 million active lines, and over 60% of the population are below the age of 25 (Jaiyeola, 2025; CBN, 2023; KPMG, 2023; European Commission, 2024). This current trend holds great prospects for the growth of PE and VC investments in Nigeria.
“Technology is likely the most transformational force affecting the future of PE and VC in Nigeria… This digital infrastructure has allowed the fast growth of tech firms in areas ranging from banking and edtech to transportation and healthtech. One of the most important developments is the growth of mobile money apps and digital payment systems… In the future, as Nigeria accepts technology innovation, sustainable development, and economic diversity, the country’s need for PE and VC will definitely rise,” submits the report.
Technology sector: the most attractive for private equity and venture capital
Technology presently ranks top among the new growth industries for private equity and venture capital investments in Nigeria. The fintech sector is the most enticing to both local and foreign investors, accounting for roughly 60% of all VC transactions with major beneficiaries including Flutterwave, Opay, and Moniepoint. Fintech companies in Nigeria got over $1.2 billion in VC capital in 2022, making fintech the top field for investments. Flutterwave’s $475 million, OPays’ $400 million, Moniepoint’s $110 million and Moove Africa’s $100 million funding rounds and the acquisition of Paystack by Stripe for $200 million were very remarkable in Nigeria’s emergence as a top destination for VC investment in Africa. Moniepoint’s funding round, supported by investors including Google, elevated its valuation to over $1 billion, granting it “unicorn” status.
Other areas, like edtech, agritech, healthtech and renewable energy, are also gaining in ascendancy. Nigerian healthtech startups collected more than $200 million in 2022, green energy companies received over $500 million in funding in 2022, Agritech companies won over $53.2 billion in funding in 2021 and by 2027, ThriveAgric wants to provide $500 million in loans to 10 million smallholder farmers, and by 2050, it wants to give $1 billion to 20 million. The success of these companies such as Opay, Flutterwave and Paystack, which garnered substantial PE investments before hitting unicorn status, indicates the increased appetite for tech-enabled firms in Nigeria.
“[Venture Capital] has become an essential component of Nigeria’s startup ecosystem, providing funding and strategic support for high-growth companies…The success of VC-backed startups in Fintech, Healthtech, and Agritech is a testament to the transformative impact of venture capital in Nigeria,” noted the report.
Improved corporate performance and business success
This report by Rome Business School Nigeria shows that PE-backed firms are more likely to fare better than their non-PE-backed peers in navigating the vicissitudes of the business environment. Many Nigerian firms that have acquired PE funding have been able to boost their market competitiveness, update their operations, and strengthen their governance systems. Private equity has proven to be very successful in reviving failing companies in Nigeria. Some Nigerian firms that were facing operational or financial problems were able to reorganize and restart their operations with PE funding successfully. PE and VC are important for improving business success and company control as they often offer as substitute for funds equity, strategic assistance, and industry knowledge. PE companies provide businesses with the tools they need to weather economic crises and produce a profit again via financial injection, strategy rearrangement, and management tracking. The existence of PE and VC companies in Nigeria has helped companies overcome the conventional finance constraints, economic uncertainty, complicated legislation, and currency devaluation challenges (PEVCA, 2024).
New frontiers, job creation and economic progress in Nigeria
One of the major impacts of private equity in Nigeria is that it has open up new frontiers and made enormous contribution to economic diversity. According to a report by PricewaterhouseCoopers (2024), PE investments have boosted non-oil companies, lowering the country’s dependence on crude oil earnings. In a country where the unemployment rate was 38.06% in 2023, the contribution of venture capital to job creation and economic progress in Nigeria have been enormous. VC-backed enterprises in Africa produce an average of 100 direct and indirect employment according to McKinsey & Company (2022). In Nigeria where youth unemployment is a serious concern, investment from private equity (PE) and venture capital (VC) have helped companies grow, develop, and create jobs, thereby improving nation’s economy. Every $1 million spent in PE and VC-backed companies led to the creation of about 40 direct and secondary jobs (PwC, 2022). According to Gornall and Strebulaev (2015), employment at VC-backed businesses has grown by an average of 18% yearly, showing the effect of private money on workforce growth.
“Nigeria is one of the top receivers of private capital investment in Africa, with billions of dollars coming into various businesses each year. The value of PE and VC is clear in their input to job growth, creativity, and general economic development. By giving huge capital and strategic guidance, PE and VC groups have helped startups grow, boost efficiency, and compete worldwide,” stated the report.
