This article was originally published in Vanguard Nigeria on October 19, 2025.
Nigeria's tech ecosystem has produced remarkable success stories—Flutterwave, Opay, Interswitch, and recently Moniepoint have put us on the global map. However, beneath the celebration lies a troubling reality: fintech captured 72% of Nigeria's startup funding in 2024, and nearly half of Africa's $1.4 billion in H1 2025 went to four fintech startups, including one from Nigeria, LemFi, while critical sectors such as agriculture, manufacturing, and logistics remain starved of investment. We've become a one-trick pony in a race that demands versatility, and international investors are starting to notice.
Market saturation reaches alarming proportions
Nigerian startups raised $520 million in 2024, with fintech commanding overwhelming dominance. Moniepoint's $110 million Series C achieved unicorn status while the next largest deal was just $33 million, a staggering 70% drop that illustrates how capital pools around payments while everything else fights for scraps. Nigeria now hosts over 430 fintech companies as of February 2025, up 70% from 255 in January 2024. That's 28% of all African fintech companies despite representing just 15% of the continent's population.
Meanwhile, Egypt diversified across proptech, edtech, and logistics, capturing $330 million in 2024 funding despite having a smaller population. Kenya led the way with a focus on climate tech and secured a total of $638 million in startup funding across diverse sectors.
The convenience trap that's killing innovation
Fintech became our comfort zone because it's easier. Building a payment app requires less capital than establishing manufacturing plants or research laboratories. Investors love fintech's predictable playbook: acquire users, process transactions, take fees. The metrics—MAUs, GMV, transaction volume—are neat, simple, and scalable.
But this convenience has created a feedback loop: big exits breed more fintech founders, who attract fintech-focused VCs, who fund more fintech clones. Meanwhile, entrepreneurs trying to build factories, energy solutions, or export industries can't even raise seed capital. Nigeria's fintech sector attracted over $2 billion in investments in 2024 alone. Imagine if even 20% of that went to solving our energy crisis or building export industries.
Success stories beyond payments prove untapped potential
Recent non-fintech funding rounds reveal the massive opportunities we're ignoring. Winich Farms raised $3 million to connect 150,000+ farmers across 30 states, achieving 300% GMV growth while addressing food security. Field secured $11 million from the Gates Foundation to strengthen pharmaceutical supply chains serving 40,000+ healthcare providers. Arnergy raised $18 million to tackle Nigeria's electricity crisis—only 12GW grid capacity for 200+ million people.
Consider the stark contrasts: Intron Health raised $1.6 million for AI clinical speech recognition, achieving 92% accuracy on African accents, yet Zone raised $8.5 million merely for payment infrastructure expansion. Tomato Jos raised just $12.2 million after 10 years addressing Nigeria's $1.5 billion annual tomato paste import dependency, while payment startups routinely secure larger amounts in seed rounds.
International models show the path forward
In March 2025, South Africa unveiled a bold industrial policy, committing 1 billion rand (~$54 million) to spur local production of electric vehicles, batteries, and related manufacturing. The plan, designed to shift the automotive industry toward new-energy vehicles by 2035, is expected to crowd in 30 billion rand in private investment. Just months later, in July 2025, Kenya's clean-energy startups dominated headlines, securing 83% of Africa's $550 million in startup funding that month.
Bold action is required now
Nigeria should consider several complementary strategies to broaden its innovation base. A dedicated Deep Tech Fund with long-term horizons and government-backed risk mitigation could make non-fintech investments more attractive to cautious investors. Sector-specific sandboxes in health tech, agritech, climate tech, and ed tech could help unlock innovation while managing risk appropriately.
But money and policy are not enough. Investors must graduate beyond fintech's comfort zone and back ventures with longer horizons. Founders must tackle less glamorous problems because Nigeria's next unicorn will not be another payments clone, but the company that powers factories to global competitiveness or makes quality healthcare truly accessible.
The choice is ours
Nigeria can continue to build the 431st mobile wallet in an economy that barely manufactures anything, or we can develop technologies that create wealth rather than just circulate it. Our fintech phase was necessary to lay the rails of digital payments, but mistaking the foundation for the whole building is why hundreds of fintechs now chase the same customers, competing on transaction fees instead of creating transformative value.
The opportunity is significant, and the timing feels right for this broader vision.
