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Where Are Nigeria’s ICT Venture Capitalists?

By Wayan Vota on February 8, 2010

I hear much talk about how the Nigerian information and communication technology industry is the 2nd largest industry in Nigeria, right behind Oil and Gas, but I don’t believe it. Why? Because if ICT were really such a large part of Nigerian economy, we’d hear about a thriving venture capital community that’s support it.

Who is investing in ICT?

Who are the Nigerian Venture Capitalists?

Recently on the Naija IT Professionals newsgroup, we were presented with a list of Nigerian venture capital companies. But in researching the VC’s Internet footprint, I only found these to be viable organizations:

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Do any Nigerian Venture Capitalists focus on ICT?

One key aspect of Silicon Valley’s dominance of the ICT sector, in everything from hardware, to software, to services, is the tight interplay between VC’s and the surrounding technology companies. VC’s provide the rick and patient capital that helps two college students go from garage fiddling to Hewlett-Packard, Apple, Microsoft, and Google.

Yet, if we look at the Nigerian ICT landscape, there are few, if any standout VC’s. I checked each organization’s portfolio from those listed above, I didn’t see a focus on the ICT industry, or even the mention of ICT company investments.

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No VC’s? Then no large-scale ICT industry

Now why does this matter? Couldn’t the Nigerian government, funders of some much else, also become the venture capitalists? As Paul Graham notes in his How to Be Silicon Valley post, VC’s do matter more than government:

Do you really need the rich people? Wouldn’t it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. This (a) helps them pick the right startups, and (b) means they can supply advice and connections as well as money. And the fact that they have a personal stake in the outcome makes them really pay attention.

Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue— or perhaps more accurately, Vogue editors running a math journal.

So in the end, I don’t believe that ICT is the 2nd largest in Nigeria. If there are no high-profile VC’s, there can’t be the Silicon Valley that can spawn a sizable technology ecosystem. In fact, how can Nigeria’s technology industry be of any decent size when the World bank says that Sudan and Zimbabwe have higher Internet penetration than Nigeria?

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Written by
Wayan Vota co-founded ICTworks. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of his employer, any of its entities, or any ICTWorks sponsor.
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2 Comments to “Where Are Nigeria’s ICT Venture Capitalists?”

  1. Possicon says:

    Thank you so much for this piece, it’s spot-on!

    ICT is sure a robust industry in Nigeria but the spread is uneven looking at it; Telecom has almost all the ICT investment i n Nigeria.

    Our internet market though with millions of customers is still an uncharted territory, as i understand, investors invests in businesses they understand and believe. Right now, some with monies in Nigeria dont understand the internet market. Others that have seen remarkable growth in telecoms have invested. People like me and others have been writing on guiding the investors to understand the market. (http://webtrendsng.com)

    Silicon Valley was created; led by people who had the technical competence, vibrant ideas and passion to change the world. Then they went ahead!

    There are array of events being organized across Nigeria on intimating investors about the potentials of the Nigerian internet market. About 3 of the events will be held this year.

    1. Technology Outlook 2010: This event have been largely dominated by telecoms discussion and investment but this year, they have invited web innovators.

    2. G-Day Nigeria: Google also saw the potential of the market and have organized an event to woo the technologist.

    3. barcamp Nigeria: This event is about Technlogist sharing ideas and forging growth and network in the industry. One was held last year and another one is in the making this year. http://barcampnigeria.com

    This industry will live up to its potential as people start taking the centre stage (which they have) and in no time we will discuss about taking on the world!

    Thank you.
    – POSSICON

  2. Maybe that assertion comes purely from the Telecoms (I.e. GSM) Industry. And it makes sense. Nigeria is very good at monolithic economies, so it is plausible that the business of making phone calls is second only to oil. The full scope of IT however, is greatly underrepresented in funding, use and mindshare.