Agriculture and Healthcare–the Hidden Treasures of the Startup Land Nigeria Bring Business Collaboration Opportunities

Written by Hiroto Sorita and edited by the Universe Editorial Team

This is Hiroto Sorita from Global Brain (GB), investing in African startups.

Together with our President & CEO Yasuhiko Yurimoto, we had the opportunity to welcome the members of the Office for Nigerian Digital Innovation (ONDI) in our office for an in-person meeting. This article features the discussion we had on the current state of Nigeria’s startup environment.

(The affiliations and roles may have changed after the interview.)

How the Nigerian government sees startups today

ONDI is a governmental institution established to drive digital innovation in Nigeria and to support the development of the country’s startup ecosystem. It comes under the umbrella of the National Information Technology Development Agency (NITDA) which formulates and executes Nigeria’s IT-related policies.

Victoria Fabunmi, the National Coordinator of ONDI, kicked off the meeting by giving us an overview of ONDI and sharing insights on the startup landscape in Nigeria.

Victoria explained that Nigeria’s digital economy is growing twofold every year, now enabling 150 million people to access the internet. Nigeria gives birth to the most number of unicorn companies in the African continent with five in total, and its startup environment is maturing.

She also shared with us ONDI’s various initiatives to support the development of the innovation ecosystem by touching upon some of ONDI’s programs such as the technology training program for 3 million young talents and the entrepreneurship development program “iHATCH.” We learned that ONDI also works hand in hand with Japan International Cooperation Agency (JICA) and the Japan External Trade Organization (JETRO) to help startups build partnerships with Japanese companies.

Last but not least, Victoria passionately expressed her hope for “Japanese companies to pay attention to the startup ecosystem in Nigeria,” emphasizing the importance of enhancing partnerships between the two countries to revitalize both markets.

On the same day, we also had the opportunity to interview Naonobu Fuwa, who is assigned to ONDI from JICA as an expert in startup ecosystem building. He is now supporting the development of Nigeria’s ecosystem. Find out what he shared with us below.

Why Nigeria is home to unicorns

(The questions in bold were asked by the Universe Editorial Team.)

──What potential do you see in Nigeria and in the startups in this country?

Fuwa: The biggest reason I have my eyes set on Nigeria is its market size. Although the African continent has a large population, market sizes tend to be small in many countries. However, Nigeria is different. It is the one and only country in Africa with over 200 million people and this number alone clearly points to a large market.

Therefore, while many African startups have no choice but to expand into other countries for growth, Nigerian startups have the potential to grow their businesses even if they stay inside Nigeria. This is one of the reasons startups in Nigeria are more likely to turn into unicorns.

Also, because the problems that reside in Nigeria are commonly seen in the entire Sub-Saharan Africa, startups that achieved success in Nigeria have a high possibility of succeeding in growing their businesses in other regions. We can say, “a startup that conquers Nigeria, conquers Africa”.

──Do you see any startup sectors that particularly show potential for growth?

Fuwa: Fintech is an often-referred sector that we should keep our eyes on. If we think about collaboration with Japanese companies, I would say agriculture and healthcare are also sectors we should also pay attention to.

The spread of fintech has enabled people without bank accounts to make remittances or payments. But it’s not only that. Financial infrastructure has big impacts on other industries too. For example, payments were collected in cash in the agriculture and healthcare sectors before, but now fintech has provided an efficient payments collection to replace cash. The development of fintech is starting to benefit various industries.

Nigeria has also seen rise to startups that bring together farmers, pharmacies, and hospitals. If Japanese companies work together with these startups, they will have new opportunities to sell their products by leveraging the startups’ local sales channels.

Given how the industries and the startup ecosystem is more mature than ever, I would say now is the time for Japanese companies to enter the market.

Hiroto: From my experience working in Africa in my previous job, the challenge I saw Japanese companies struggling to overcome was reaching out to the local end customers in Africa. But because local startups can give a leg up, I also feel it is now easier for Japanese companies to collaborate with African startups.

How to collaborate with a promising startup

──Please tell us if there is anything Japanese companies should be mindful of when doing business in Africa or if you have any advice.

Fuwa: You do need to be mindful of cultural differences. For example, in Nigeria, there can be a more flexible approach to time. When asked to meet at 11 o’clock, it’s sometimes understood that arriving shortly after is acceptable. Some Japanese may have struggles as they’ll find this different from what they are used to, which can present initial challenges in business settings.

Hiroto: On the other hand, there are more people in Nigeria who are aggressive business people by nature compared to other African countries. They are eager to succeed in business and change their lives. In that sense, Nigeria is a country with a good environment to do business.

Fuwa: To advance collaborations between Japanese companies and Nigerian startups, it is vital for the management of those companies to come to Africa and perceive the profitability firsthand. Unfortunately, there is currently no ecosystem in Nigeria for Japanese people to attract other Japanese people. This is a big challenge.

──Is there an appropriate time for Japanese companies to embark on collaborations with and investment in Nigerian startups?

Hiroto: Nigeria has devalued its currency multiple times. Startups that overcame the impacts of the devaluation will probably start emerging in August 2025 when TICAD 9 (The Ninth Tokyo International Conference on African Development) will be held. By next year, we will have a clear view of the strong startups that will have survived today’s difficult market environment.

Additionally, last year, the Nigerian government made the significant decision to removed its fuel subsidy (this article is in Japanese only), resulting in a substantial increase in gasoline prices. This posed challenges for businesses due to rising operational costs. However, we will soon see which startups have not only survived but thrived in the face of these challenges, demonstrating resilience and adaptability amidst the dual pressures of currency devaluation and higher fuel prices.

Fuwa: Same as global trends, we see a bipolarization of Nigerian startups. Only the ones with growth capabilities will survive, which naturally will make it easier to pick promising startups.

However, if you wait until the promising startups are identified, it might be too late to start collaborations or investments. It is important for Japanese companies to start building relationships now.

──So companies should be ready to kick-start the collaborations before next year, when the unpromising startups will have been weeded out.

Fuwa: Yes. The biggest problem Japanese companies face is getting misleading information about Africa. It is not rare to see cases where incorrect information is believed to be true due to the distance between the two countries. We need to provide more chances to companies so that they can have an accurate understanding of Nigeria.

We at JICA run a project named “Project NINJA” to create business innovations in developing countries, and we also promote collaboration between Japanese companies and Nigerian startups. We actively host seminars to share examples of Japanese companies entering Africa, and I am confident we provide useful information.

Going beyond “seminars on Africa,” I am eager to hold seminars that are focused on each country like Nigeria or Kenya and on different sectors such as finance, agriculture, or healthcare and make them mainstream. In Japan, many people are interested in “Africa as one.” However, if more and more Africa-related information comes in, I believe people will start to have interest in what is happening in each African country. The future I want to create is one where it becomes the norm for Japanese companies to plan business strategies tailored to each country in Africa.

Wrap-up

ONDI’s Victoria and JICA’s Fuwa-san gave us insights and takeaways we can only gain from people who are in Nigeria and see what is happening with their own eyes. Feeling their passion to revitalize Nigeria’s startup ecosystem made me renew my commitment as an investor in Africa.

GB will continue to strengthen relationships with ONDI and JICA to further improve our investments in Africa.

On GB Universe, we plan to share more information on African startups for Japanese stakeholders. Stay tuned.

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