Lagos Ranked as Africa’s Most Valuable Startup Ecosystem

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The recently released Global Startup Ecosystem Report and Ranking 2017, produced by Startup Genome in collaboration with the Global Entrepreneurship Network (GEN) has ranked Lagos, Nigeria as Africa’s most valuable ecosystem.

The report listed Cape Town, Johannesburg and Lagos as the top 3 startup ecosystem in Africa, with Cape Town being the largest, with a value of US$172 million, and having between 700 and 1,200 active tech startups in the city. Johannesburg on the other hand, valued at $1.36billion is home to an estimated 200-500 active tech startups, and has the highest global connectedness in Africa.

According to the 150-page report which is based on conversations with entrepreneurs and massive amounts of data on startups, at $2 billion, the Lagos startup ecosystem is the most valuable startup ecosystem on the African continent, but only second after Cape Town, in terms of number of startups.

“While Nigeria is busy adding six million new internet users every year, the feverish entrepreneurial energy of Lagos and its estimated 400-700 active startups stayed consistent by providing them with useful new technologies.”

The report further revealed that the Lagos ecosystem has the 9th highest rate of Founders with an Undergraduate Degree at 59%, while 93% of them have a technical background, the 3rd highest rate in the world.

However, Lagos startups was said to have one of the lowest rates of Foreign Customers at 6%, suggesting challenges to Go Global. Only 11% of startups plan to Go Global.

“As the business models of local startups become more robust and innovative over time, we also see more of them also make headlines by receiving big checks from top Silicon Valley VCs including Greycroft, Khosla Impact, Green Visor, Social Capital Partnership, and many others.

We anticipate more headlines from Lagos as they work to establish themselves as a hub for startup investment and
innovation over the next few years,” the report said.

Startup Genome examined how cities help growing and sustaining vibrant startup ecosystems through nine major factors: performance, funding, market reach, global connectedness, talent, startup experience, resource attraction, corporate involvement and founder ambition.

Globally, Silicon Valley ranked first, for everything except talent, becoming the number one global startup ecosystem. New York and London were ranked second and third respectively, while Beijing and Boston completed the top five global startup ecosystem.