State of Play: Funding in Nigeria’s AI-Focused Startup

Our findings revealed that finance and insurance are predominant sectors for AI adoption. We compared both sectors to derive nuanced insights about the use and nature of funding in both sectors. We found that, while finance has traditionally taken the lead in funding, insurance might upstage finance in 2022, as insurance enjoys more support from angel investors than finance. Projects initiated by startups compared to those by established corporations; To determine which gender is receiving more funding for AI-led projects and why; The countries (apart from Nigeria) where the products and services are available; The sectors receiving funding for AI projects; The stage and nature of their funding (debt, equity, non-equity assistance, or self-funded);The amount of funding they have secured; The source of funding (institutional investors or angel investors);Track record of the investors. Intended use of the funds raised.

We also found that the most common funding stages in all sectors examined were pre-seed and seed. Although the number of investors at the seed stage is higher, the year-on-year growth of pre-seed funding is faster. In addition, seed stage startups were found to be more focused on their spending priorities than pre-seed counterparts that try to hit several targets with their first cheque.