Four in five Nigerian startups are formally incorporated in the US. This number includes the likes of Paystack, Flutterwave, Moniepoint and ThriveAgric.
On the capital side, 60% of the total venture funding to Nigerian startups came from the US. These data points were revealed by US Consul General Will Stevens during his keynote address at the Global Tech Africa Conference in November 2023.
A concentration point for venture capital in the US is the Bay Area which refers to San Francisco and its surroundings (like San Jose metros). Last year, the US venture funding that went to startups in the Bay Area surpassed 40%, according to Crunchbase data.
Beyond capital, the Bay Area is home to an enabling tech ecosystem that includes the world’s leading startup accelerator, Y Combinator, which is headquartered in San Francisco. In a 2019 interview, Flutterwave’s CEO Olugbenga Agboola said, “We set up in San Francisco because of YC.” Since its first African investment in 2012, YC has backed over 106 African startups–about 50% Nigerian.
The Bay Area isn’t just an address; it’s a global innovation hub that houses tech giants such as Apple, Google and Facebook, and billion-dollar startups including Uber, DoorDash, and Instacart.
It’s an innovation hub because it’s a melting pot for adventurous capital, talent, and an enabling ecosystem for startup growth. Seed to growth-stage startups in the Bay Area raised an alarming $49.3 billion in 2023, accounting for 41% of the US total. The leading global startup accelerator, Y Combinator (YC) is headquartered in San Francisco.
In a 2019 interview, Flutterwave’s CEO Olugbenga Agboola said, “We set up in San Francisco because of YC.”
YC, alongside other US investors, provide much of the capital that flows to startups in Africa. Since its first Nigerian investment in 2016 (Paystack), about 50% of every African company that gets into YC has come from Nigeria.
Recognising the strategic importance of the Bay Area to the Nigeria tech ecosystem, the country is taking a bold step. For over two decades, a 4,200-square-foot property owned by the Nigerian government sat unused in San Francisco. On Tuesday, Bosun Tijani, the country’s minister for communication, innovation and digital economy, announced that the Federal Executive Council has approved the conversion of this property into the “Nigerian Digital Technology Exchange Programme Hub” (Nigeria Startup House).
“This initiative is critical for promoting Nigeria’s economic interest,” Minister Tijani stated. He elaborated on the goals: attracting foreign direct investment and boosting the visibility of Nigeria’s startup ecosystem. The facility will be managed by a consortium of Nigerian digital technology companies, leveraging private funding to support its operations.
Opeyemi Awoyemi, the founder of Fast Forward Venture Studio, said: “If done well, we will see increased investments in and global emergence of Nigerian startups and talent.”
The minister has yet to disclose the proposed launch date.
This is a developing story.
