In the frenetic landscape of Nigeria’s startup ecosystem, collaboration seems to be less about corporate handshakes and more about village-style alliances. A new report by TLP Advisory, A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories, provides a sharp lens into why and how Nigerian startups partner among themselves. The findings highlight an ecosystem that thrives on startup-to-startup connections, with brand visibility topping the list of mutual rewards.
According to the report, over a third (38%) of Nigerian startups have partnered with other startups. This is significantly higher than the 26% that have corporate partnerships, 21% that have worked with accelerators and incubators, 9% with non-profits, and a modest 5% with government entities. The last figure is a glaring reminder of the bureaucracy-laden hurdles that often discourage partnerships with public institutions.
In a sardonic nod to this state of affairs, one could argue that startups have opted to sidestep government partnerships altogether — after all, why wrestle with red tape when a fellow startup could offer faster solutions with fewer headaches? As Samuel Okwuada, co-founder and CEO of Remedial Health, puts it, “It takes a village to build this sort of thing. If you’re going to solve an infrastructure problem, you need a whole village.” The government, it seems, often misses the memo to RSVP.
The allure of startup-to-startup partnerships lies in their simplicity and effectiveness. With partnerships reported by 68% of respondents in the last decade, the ecosystem leans heavily on a “collaborative survival” model. Whether through joint ventures, strategic alignments, or informal alliances, startups are building bridges to achieve mutual goals and tackle common challenges.
What do these partnerships deliver? Primarily, visibility. Brand visibility emerged as the most significant benefit, with 25% of respondents citing it as the primary gain. Expansion into new markets followed at 19%, while enhancements in product and business offerings stood at 17% and 15%, respectively. Regulatory support, however, brought up the rear at a meager 9%, a quiet admission that partnerships are no panacea for Nigeria’s labyrinthine regulatory framework.
In a climate where standing out is a Herculean task, partnerships offer startups the kind of visibility that might otherwise cost a fortune in marketing spend. But this mutual back-scratching is not without its challenges. As Oluyomi Ojo, co-founder of Printivo, aptly notes, “The ecosystem’s strength is in its village-like support — whether in distribution, funding, or regulatory issues.” Yet, the village can sometimes feel like a cul-de-sac when partnerships fail to scale into meaningful impact.
A Decade of Growth and Setbacks
The report also charts the rise and growing pains of Nigeria’s startup ecosystem. As of 2022, Nigeria was home to approximately 3,360 startups, the highest concentration in Africa, with Lagos accounting for 88% of these ventures. But this is no happily-ever-after narrative. Nigeria also leads the continent in startup shutdowns, with an eye-watering 47% closure rate over the past decade.
Capital constraints remain the primary culprit behind these failures. Despite the blossoming of partnerships, many startups struggle to navigate the harsh realities of funding gaps and a volatile economic environment. The irony, of course, is that while partnerships are often about amplifying market reach and operational capabilities, they cannot always compensate for financial shortfalls.
The findings from TLP Advisory’s report suggest that startups are choosing practical alliances over aspirational ones. Partnering with fellow startups offers quicker wins and fewer layers of negotiation, but it also underscores the limitations of the ecosystem’s structure. If the regulatory environment were more navigable, or if corporates showed a greater willingness to engage with startups, the distribution of partnerships might look very different.
For now, Nigerian startups continue to innovate and partner, navigating their way through an unpredictable terrain. As the report subtly reminds us, partnerships in Nigeria are not just about the proverbial village — it’s also about knowing which neighbors to avoid. Whether this collaborative instinct can fully sustain the ecosystem’s growth remains an open question, but for now, startups are making do with what they have: each other.