Private equity (PE) and venture capital (VC) have rapidly evolved into vital funding lifelines for Nigerian startups, drawing in over $1 billion annually. From Moniepoint’s $110 million to Moove Africa’s $100 million funding rounds, Nigeria’s startup ecosystem is witnessing unprecedented investor confidence. Between 2020 and 2024 alone, the country recorded 404 private capital transactions worth US$3 billion, representing 66% of West Africa’s deal volume and 52% of its deal value.
According to the Rome Business School Nigeria report on Private Equity and Venture Capital in Nigeria, these investments are reshaping the nation’s startup landscape by bridging funding gaps and unlocking growth opportunities for early-stage businesses. In 2024, Nigeria led Africa with $1.18 billion in startup funding out of the continent’s $3.6 billion total, driven by record-breaking deals in fintech and mobility.
The technology sector has proven to be the strongest magnet for venture capital, accounting for 82% of total VC activity, about US$2.7 billion between 2020 and 2024. Lagos alone hosted 65% of all VC transactions, reinforcing its position as the continent’s tech hub. Beyond the numbers, PE and VC firms bring more than financial capital, they provide mentorship, strategic guidance, and market access, enabling startups to thrive sustainably.
Yet, the ecosystem faces persistent hurdles: foreign exchange volatility, complex regulations, and infrastructural gaps. Nigeria’s high corporate tax rate (30%) and VAT increase to 7.5% continue to challenge profitability and discourage foreign investors. Currency depreciation, energy costs, and insecurity further compound these issues. Still, optimism remains strong, as economic diversification efforts are unlocking new non-oil frontiers.
Government focus on technology, agriculture, and manufacturing, supported by rising digital penetration, a booming youth population, and the growing participation of pension funds, signals sustained transformative growth. Over ₦22 trillion (about $13 billion) in pension funds were directed toward private equity in late 2024, reflecting deepening investor confidence.
Technology continues to lead the charge, with fintech commanding about 60% of all VC transactions. Powerhouses like Flutterwave, Paystack, Moniepoint, and Opay have attracted multi-million-dollar investments, earning unicorn status and proving Nigeria’s capacity to produce globally competitive ventures. Other sectors, such as edtech, agritech, healthtech, and renewable energy, are also drawing investor attention, further diversifying the investment landscape.
Private equity has not only revived struggling companies but also driven improved governance, competitiveness, and job creation. PE-backed firms in Nigeria outperform non-PE-backed peers, thanks to strategic restructuring and access to managerial expertise. Every $1 million invested through PE and VC generates about 40 jobs, highlighting their socioeconomic impact.
In a nation where unemployment remains high, the influence of private equity and venture capital extends far beyond financial returns, it is about transformation. These investments are powering innovation, enabling resilience, and catalyzing economic growth across industries.
As the Rome Business School Nigeria report concludes, technology will remain the most transformative force shaping the future of PE and VC in the country. With the right policies, strong institutional frameworks, and a continued embrace of innovation, Nigeria’s private capital landscape is poised for even greater disruption and impact in the years ahead.
