Now investors are looking to the
other side of the African continent for results. Nigeria, with nearly
200 million people, a growing economy, and no shortage of local
problems, stands out as an option. It’s slowly building up a tech sector
of its own. The funding circuit is still small: probably no more than
10 companies investing money, says Kresten Buch, founder of the Nairobi
tech accelerator 88mph (which has since expanded to South Africa).
The biggest difference between
Nigeria and other major African economies is its sheer size. With
roughly four times as many people as Kenya or South Africa, Nigeria is
big enough to reward products and services that are domestic in nature.
One
example of that is Obiwezy, a venue for selling used smartphones.
Nigeria is primarily a pre-paid market, where customers pay the full
cost of a handset up front. That puts most high-end devices out of reach
for all but the very rich. But the aspiration to own a high-end Apple
or Samsung handset remains, as it does elsewhere in the world. Obiwezy’s
founders figure that a secondhand market—with warranties—is one way to
sate that demand. They have tied up with MTN, a large telco, to offer
the service.
Nigeria still has a big hole
where investors willing to put in between $100,000 and $1 million should
be. For now, investors are ensconced in Nairobi. But that might change
as Nigeria’s companies grow larger, signaling opportunity to
deeper-pocketed investors looking for returns.
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