The Nigeria Sovereign Investment Authority (NSIA) has said it will be scaling up its funding for innovative young entrepreneurs after it put $225,000 on 10 Techprenuers at the end of the NSIA Prize for Innovation (NPI) programme.
This as the National Information Technology Development Agency (NITDA) said, it is working on kickstarting a N100 billion seed funding which will be managed by NSIA for startups. Having received over 2,000 entries that were reviewed over a six month period, the NSIA at the weekend, awarded the grand prize to Money Africa, a startup that uses technology to promote finaincal literacy founded by Oluwatosin Olaseinde.
The $225,000 funding for the Techprenuers which comes in the form of cash and equity according to the NSIA is a catalyst for the innovation and digitization sector in Nigeria.
Speaking on the sidelines of the NPI Demo Day at the weekend, managing firector and chief executive of the NSIA Mr Aminu Umar-Sadiq, said applications had been shortlisted down to 25 which progressed to the accelerator program that then led to the final 10 that presented at the demo day.
Noting that the event showcases ideas emanating from Nigeria entrepreneurs to solve Nigerian problems, Umar-Sadiq said: “it allows us to mobilise domestic capital towards Nigerian ideas, examples of which we have seen here. So hopefully beyond that, we also looking at the value creation and the value addition that comes beyond the investment in these companies.
“The introductions they will require, further polishing of their business ideas, the positioning of these companies for exits. We are hoping that this event will shine a light on the possibilities that our own local entrepreneurs are able to offer for solving Nigeria’s problems.”
On why the NSIA had opted for cash and equity as prizes for the winners, he explained that, spliting the prizes into components; a cash and equity component “allows NSIA take ownership in these businesses. So that beyond just the prizes we can actually engage with the entrepreneurs and value add to them beyond offering money. The way capital is going to go in as equity is through venture partners.
“So they will actually manage the capital, the equity investment on behalf of NSIA working with the entrepreneurs, the venture capital firm, and so all of the things that you will expect of a VC fund, the value addition the convening power, the positioning for exits all of those things venture partners will do on behalf of NSIA. Our intention is to go beyond just today, in terms of our relationship with the entrepreneurs.”
On his part, the director general of NITDA, Mr Kashifu Abdullah, noted that, the Demo Day “shows that we have great potentials in Nigeria and looking at what is happening and this kind of initiative to provide seed funding for startups. It will really help position Nigeria for accelerated jobs creation in the digital economy. Mostly startups fails because of lack of financing. And according to many research, more than 47 per cent of startups fail because of lack of financing at the initial stage.”
On the Startup Act which was inaugurated in April this year, he said: “we have started the implementation of the Nigeria Startup Act. Under the Act we are to establish startup investment Seed Fund. The Act says we need a minimum of N10 billion naira per annum, but we are targeting N100 billion so that we should be able to seed at least 1000 early stage startups and about 400 late stage startups. This can help us in creating more than 80,000 jobs in Nigeria.”
At the end of the demo, seven innovators-TruQ, Capsa Technology, Apace Technology Solutions, Ya-lo Technologies, Credit-Chek, Vella Finance and Kobopay Technologies won the fourth place of $5,000 each and LegitCar Africa won the third place of $12,500. Extension Africa won the second place of $17, 500 while Money Africa won the star prize of $25,000.
