Afrigather On October 11, whereas chatting with African reporters on the sideline of the just-concluded GITEX 2022 in Dubai, the particular advisor to the Lagos state governor on innovation and know-how, Olatunbosun Alake, mentioned that the federal government is planning to launch its personal enterprise capital fund that may “write greater fairness cheques for Nigerian startups than most privately-owned VC.”
“We’re working to launch a Lagos enterprise fund of larger ticket sizes,” Alake mentioned. “The place regular VCs anticipate to money in returns in 5 to 10 years, we’re going to have the ability to do extra time as a result of we want extra mission important merchandise that may serve the residents.” The fund could be cross-sectoral together with fintech, agriculture, well being, and most significantly, “analysis and growth startups.”
Alake didn’t reveal the dimensions of the funds and the precise ticket sizes, however he talked about that it could be launched “a number of weeks from now” and the state is already in conversations with some native and international buyers that may be a part of as restricted companions (LP). “Lagos state would function the final and managing accomplice of the fund,” he added.
This, in accordance with the adviser, comes after Lagos state’s equity-free investments in startups within the state, together with Techstars-backed Farmz2u, an agritech startup which additionally exhibited in Dubai, via Lagos State Science Research and Innovation Council (LASRIC). The Nigerian industrial state, which was in Dubai to show and preach its sensible metropolis blueprints to buyers and onlookers, mentioned it’s actively launching initiatives that may assist startups thrive within the state.
A digital metropolis wants a powerful web infrastructure which Lagos state at present lacks. The state’s deputy governor Femi Hamzat, who was additionally current on the occasion, mentioned Lagos is at present laying fiber optics web cable throughout the state because it will get prepared for its digital future. He additionally talked about that the state needs to put in 20,000 closed-circuit tv (CCTV) cameras throughout its streets to implement safety and mechanically management visitors. “1000 installations will mark the tip of the primary part, and we’ve put in about 600,” mentioned the deputy governor.
A Bolt driver who spoke to TechCabal anonymously on a distinct event confirmed that there are actually CCTV cameras throughout the Ikeja space of Lagos. “I used to be fined ₦50,000 for beating the visitors mild 3 months after it had occurred. I received the invoice once I went to resume my highway worthiness certificates—they pulled the video out for me to see,” the motive force mentioned.
Lagos is a startup nursery and its authorities, having realised this, is in a race to affix the fray. As a result of the majority of the Nigerian startup ecosystem relies within the state, it hosts half of the startup funding coming to the nation. 4 out of Africa’s seven unicorns had been based or are based mostly in Lagos: Opay, Flutterwave, Interswitch, Andela, and Chippa Money. A few of Africa’s greatest exits of the last decade additionally occurred in Lagos together with Paystack’s exit to American Stripe for $200 million and MainOne exit to Equinix for $350 million.
If Lagos state does launch this enterprise fund, it could be becoming a member of different governments who aren’t solely making organising startups seamless but additionally writing cheques in a bid to leapfrog their financial system—take Dubai for instance. In 2018, the President of Senegal launched DER, a $50 million fund to catalyse entrepreneurship throughout Senegal. Apart from fairness funding, DER additionally offers loans to SMEs.
This initiative is coming in the course of a world financial storm when most enterprise corporations have grow to be extra stringent of their funding methods. Nigerian startups, expecially these based mostly in Lagos, would now have yet one more fund to fall again to.
Lagos state additionally sponsored 15 startups to exhibit their merchandise and pitch their startups to tons of of buyers current on the GITEX occasion in Dubai final week.
