Nigeria builds unicorns, Wall Street takes the wealth

Nigeria is producing some of Africa’s biggest technology companies, but the country is losing the biggest financial rewards to foreign markets as startups increasingly choose overseas IPOs and offshore exits instead of listing locally.

From fintech giants to e-commerce platforms and digital payment companies, Nigerian startups are attracting billions of dollars in foreign investment and serving millions of users across Africa.

Yet while these companies grow from Lagos and other Nigerian cities, many of them eventually move their holding structures, public listings, and wealth creation abroad, leaving local investors largely shut out of the profits.

The trend is becoming one of the biggest debates in Nigeria’s fast-growing technology ecosystem.

Industry leaders, founders, investors, and regulators now warn that Nigeria risks becoming merely a breeding ground for innovation while foreign financial markets reap the long-term gains.

Nigeria’s tech industry

Over the last decade, Nigeria has emerged as Africa’s leading startup ecosystem despite economic instability, currency depreciation, high inflation, and infrastructure challenges.

The country’s young population, expanding internet access, smartphone penetration, and growing digital economy have helped fuel the rise of thousands of startups solving problems in payments, banking, logistics, healthcare, commerce, and education.

According to the National Bureau of Statistics, the Information and Communications Technology sector contributed about 19.78 percent to Nigeria’s real Gross Domestic Product in the second quarter of 2024, making it one of the strongest-performing sectors in the economy.

Nigeria now hosts more than 3,000 startups and attracted over $1.18 billion in venture capital funding in 2024 alone.

The country has also produced some of Africa’s most valuable startups, including Flutterwave, OPay, Interswitch, and Moniepoint.

These companies have become symbols of African innovation and have attracted major international investors including SoftBank, Tiger Global, Sequoia Capital, Visa, and other global financial institutions.

But while the startups are rooted in Nigeria, many of their biggest financial moments are happening outside the country.

The growing foreign exit trend

A clear pattern has emerged in Nigeria’s startup ecosystem. Many companies build their customer base and operations in Nigeria but eventually look abroad when it is time to raise larger capital, attract institutional investors, or prepare for public listings.

The most famous example remains Jumia. Founded in 2012 and heavily tied to Nigeria’s market, Jumia became the first African technology startup to list on the New York Stock Exchange in 2019.

The company raised about $196 million during the listing and briefly achieved a valuation above $2 billion.

The listing was celebrated globally as a major breakthrough for African technology companies, but it also highlighted a growing concern: Nigeria created the market and users, but Wall Street captured the listing.

The same pattern appears to be repeating itself. OPay is reportedly preparing for a potential U.S. initial public offering that could value the company at around $4 billion.

International banking giants including Citigroup, J.P. Morgan, and Deutsche Bank are reportedly linked to the process.

Industry observers say the company’s possible overseas listing reflects the wider preference among startups and investors for foreign capital markets where dollar liquidity is stronger and valuations are often higher.

Flutterwave has also repeatedly discussed international IPO ambitions. Its chief executive officer, Olugbenga Agboola, has emphasized profitability and regulatory compliance before any listing plans move forward, but analysts believe the company is more likely to pursue an international listing than a local one.

For many startup founders, foreign markets now represent the safest and most profitable route for raising capital and rewarding investors.

The “Delaware–London–Lagos” structure

Behind many Nigerian startups is a corporate structure designed for foreign investors.

Industry insiders often describe it as the “Delaware–London–Lagos” model.

Under this arrangement, the operational business may remain in Nigeria while the holding company, intellectual property, and investor structures are registered overseas, especially in places like Delaware in the United States or London in the United Kingdom.

This setup offers investors stronger legal protections, easier fundraising, and smoother exit opportunities.

It also makes future IPOs on foreign exchanges easier to execute.

However, critics say the structure creates a situation where Nigerian talent and consumers build the value while much of the eventual wealth leaves the country.

Many local investors are unable to participate meaningfully in these billion-dollar success stories.

NGX technology board still waiting

To address this problem, the Nigerian Exchange Group and the Securities and Exchange Commission launched the NGX Technology Board in December 2022.

The board was designed specifically to attract startups and technology companies to list locally.

The initiative introduced startup-friendly rules, including lower profitability requirements, lighter reporting obligations, and separate categories for smaller startups and bigger technology firms.

The move was widely praised as a bold attempt to deepen Nigeria’s capital market and create local exit opportunities for startups.

But nearly four years later, the technology board remains without a major venture-backed startup listing.

While traditional companies continue to list on the Nigerian Exchange, Nigeria’s high-profile tech startups are still staying away.

This has raised concerns about whether the country’s capital market is truly ready for fast-growing technology firms.

Jude Chiemeka, the chief executive officer of Nigerian Exchange Limited (NGX) has repeatedly engaged startup founders and investors in efforts to encourage local listings.

Chiemeka has argued that domestic listings could improve corporate governance, unlock local pension capital, and create broader participation in Nigeria’s digital economy.

Still, the breakthrough listing has not happened.

Dollar funding creates pressure

One major reason for the foreign listing trend is the way startups are funded.

According to a 2025 report by TLP Advisory titled ‘Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,’ about 77 percent of funded Nigerian startups raise money in U.S. dollars while generating most of their revenues in naira.

This creates a dangerous mismatch. As the naira weakens against the dollar, investors become more eager to secure returns in foreign currency.

Foreign IPOs and overseas acquisitions therefore become more attractive because they provide dollar-based exits.

Odunoluwa Longe, a venture and technology lawyer said Nigerian startups have proven they can build globally competitive companies, but too much value still flows offshore because viable local exit options remain limited.

The report also found that many startup founders still do not fully understand the Nigerian listing process.

More than half reportedly lack enough knowledge about how the Nigerian Exchange operates or how local IPOs could work for technology firms.

Nigeria’s foreign exchange crisis has added even more pressure to startups. The sharp depreciation of the naira over the last few years has affected company earnings, valuations, and investor confidence.

Pawel Swiatek, the chief operating officer of Moniepoint, had publicly acknowledged how naira depreciation significantly affected the company’s U.S. dollar profits.

Even startups experiencing strong local growth often see their dollar earnings reduced because of currency losses.

This reality has strengthened the argument among foreign investors that startups need international structures and offshore exits to protect value.

Local investors missing the rewards

As more Nigerian startups choose foreign exits, concerns are growing about who truly benefits from Nigeria’s digital revolution.

Analysts say ordinary Nigerians, pension funds, retail investors, and local institutions are missing the opportunity to participate in the wealth being created by homegrown startups.

The situation is creating what some experts describe as a wealth extraction cycle.

Nigeria provides the market, talent, infrastructure struggles, and entrepreneurial energy that help shape strong businesses. Yet when those businesses become highly valuable, foreign markets and overseas investors often gain the biggest rewards.

Critics warn that this could weaken Nigeria’s long-term economic development.

Without strong local participation in tech wealth creation, the country may struggle to deepen its capital markets, retain investment gains, or build lasting financial power around its digital economy.

Several investors also admit that local IPOs are rarely included in startup planning.

Dolapo Morgan. investment and advisory professional. noted that many venture capital firms still view Nigerian IPOs as unlikely outcomes.

As a result, foreign acquisitions and offshore listings are often treated as the default exit strategy from the beginning.

Adewale Yusuf, the founder and CEO of TalentQL and other ecosystem leaders have called for stronger engagement between the Nigerian Exchange and startup founders through education campaigns, roadshows, and ecosystem partnerships.

Analysts say trust and familiarity between startups and local capital market institutions remain weak.

Can Nigeria reverse the trend?

Despite the challenges, industry stakeholders believe the situation can still change.

Experts say reforms aimed at improving liquidity, stabilising the naira, increasing pension fund participation, and creating incentives for local listings could make Nigeria’s stock market more attractive to startups.

Some also advocate dual listings, where startups can access global capital while maintaining a meaningful local presence on the Nigerian Exchange.

Funkola Odeleye, co-founder and partner at TLP Advisory, said the Nigerian Exchange must become more deeply connected to the startup ecosystem rather than appearing distant from it.

Analysts believe one successful tech IPO on the NGX Technology Board could transform investor confidence and encourage other startups to follow.

Such a breakthrough could create a new cycle of local wealth creation, attract more domestic investment into technology, and allow ordinary Nigerians to share in the growth of companies built in their own country.

For now, however, the imbalance remains clear.

Nigeria is building billion-dollar startups at an extraordinary pace, but the country is still struggling to keep the biggest rewards at home.

Until that changes, Wall Street and foreign investors may continue celebrating Nigerian tech success stories long before Nigerian markets do.(BusinessDay)