Last year, after almost two decades of investing in and mentoring early-stage startups, Techstars launched its accelerator program in Nigeria in partnership with ARM, the biggest non-banking financial institution in the country.
The premise of the Lagos-based program, ARM Labs Lagos Techstars Accelerator Program, is similar to its other programs in Dubai, Canada etc.; participants undergo rigorous training sessions and meet fleets of established business people and titans of industry. They learn how to raise funds, build great products, and scale their businesses.
For its inaugural cohort in Lagos, its focus was fintech and property tech companies. In March, it had its Demo Day, which became one of the biggest gatherings of members of the Nigerian ecosystem, rivalled only so far by OpenAI CEO Sam Altman’s visit to Lagos just a few weeks ago.
It’s currently accepting applications for a new class, its 2023 cohort, with its tentacles expanded. This year, it focuses on early-stage Africa-based startups with a defined MVP. Application closes on the 9th of August.
“We are a universal investor and what that means is that we invest in companies regardless of gender, race, ethnicity, or sexual preference, not just because it’s the right thing to do, but because that is where the ROI is,” Oyin Solebo, the Managing Director of the program said. She and the team have been scouting for applicants in London, Accra, Nairobi, and now back in Lagos.
She had been the co-founder and COO of Move Me Back, a startup that connects the world to African opportunities, including jobs and investment opportunities.
At the time, Techstars had been seeing an influx of Nigerian startups apply for its accelerator programs and was looking to put its money where its mouth was. Solebo decided to move back and help it settle into one of the biggest economies on the continent.
But the dynamics of the Nigerian market are very different from the one-size-fits-all strategy that would have worked in an economy more friendly to startups.
“Of course, we had to make certain changes given the nuance of the market,” Oluwadunni Fanibe, the program manager at Techstars Lagos, said of launching Techstars in Nigeria.
She had been working at another accelerator program where she focused on Francophone, East African and Nigerian startups before joining the Techstars team with Managing Director Oyin Solebo.
“We’ve learnt a lot from what we did last year,” Fanibe said, referencing the inaugural cohort. “We did an excellent job. And we’ve taken all we learnt from last year and we’re implementing it for this next cohort. We also have a bigger presence. We are more known than we were. The success shows that this is something that works.”
In the past few years, a stream of startups has been making waves in Nigeria from various Techstars programs. The list includes Klasha, Payday, and CDcare Africa, the buy-now-pay-later company that benefitted from Techstars Lagos.
“We have seen an increase in our customer base, revenue, and overall market presence. We have also refined our business model, enhanced our product offerings, and strengthened our partnerships, all of which have contributed to our growth and success,” Tobi Odukoya, the CEO CDcare Africa, said.
The decision to cast its net wider this year came from a need to want to meet the immediate needs of the market.
Africa’s booming youth population and penetration of financial services make it desperately in need of startups that fall into its four focus areas.
“Fintech still makes sense, obviously it’s where most of the capital is going from the VC perspective. But also there is a lot of impact and benefits that we are still seeing out of fintech,” Solebo said.
Just after fintech, is e-commerce sucking up VC funding as a new frontier on the continent. There has been a steady rise of digital storefronts and social commerce platforms popping on in recent years.
“There are still huge opportunities for local models that refocus on the African customer,” Solebo said of e-commerce. Then mobility comes in to help the thriving e-commerce sector.
“The increase in smartphone penetration, and a middle class which is still nascent but has tripled in the last few years,” for Solebo, points to the need to invest in startups that cater to talent.
