Lagos Dethrones Nairobi As Africa's Top startup City, Enugu Debuts on Global Ranking

Nigeria's business capital Lagos has overtaken Kenya to become Africa's number one startup ecosystem.

This is according to the recently released StartupBlink Ecosystem Index Report 2021 seen by AllNews. The report ranks Lagos 122nd globally, displacing Nairobi, Kenya, which now ranks 136th globally.

In general, the top two startup ecosystems in the world remain the same as they were last year – San Francisco and New York. San Francisco is the “supernova” of startup ecosystems, scoring 328.96, which is almost 3 times higher than New York’s 110.77.

In terms of countries, the top 5 countries have all maintained their rank from last year, however, there are several deep changes. The United States maintains a massive lead over the 2nd ranked United Kingdom as the effect of Brexit finally takes effect.

Allnews discovered that Nigeria saw a notable increase, leaping 5 spots to now rank 63rd globally. This was fueled by its massive consumer market and more than 500 active startups, one of the largest in Africa.

However, the African giant remains 3rd in Africa behind South Africa and Kenya.

South Africa moved to take the 48th spot to become the first African country in the global top 50. In Africa, there is positive momentum, with countries such as Kenya (61), Nigeria (63), Jordan (64), and Bahrain (66) moving further up in the rankings, while we see the national ecosystems of Namibia (99), Ethiopia (100), and Mauritius (73) feature in the rankings for the first time.

South Africa’s growth is attributed to its private-sector startup ecosystem and the availability of early-stage investments, thanks to forward-thinking public initiatives, while Kenya rose one spot to rank 61st globally and 2nd in Africa as made possible by its innovative tech hub, especially for mobile payment solutions. The presence of global tech giants like Google, Microsoft, and Samsung in its capital city also helped its growth.

Other African countries in the top 100 include Egypt which climbed 11 spots to rank 70th, Namibia ranked 99th followed by the vibrant seed ecosystem of Ethiopia in 100th globally.

Ibadan climbs to 2nd in Nigeria as Enugu joins the ranking

Nigeria has 7 cities in the global top 1,000 and continues to have the highest number of ranked cities of any African nation. Lagos leads the pack after gaining 5 spots to 122nd globally.

Aside from being the biggest startup city in Nigeria and Africa, Lagos is also ranked in the global top 50 cities for e-commerce and retail technology. It also made the global top 100 for both transportation technology and education technology.

Nigeria's startup ecosystem ranking per StartupBlink

Ibadan saw a massive increase in ranking, jumping 601 spots to 353rd globally and 2nd in Nigeria, surpassing Abuja. The growth of the Southwestern state can be tied to the significant growth of SafeBoda, the ride-hailing company.

The federal capital territory, Abuja ranked 3rd nationally, after falling 12 spots to 466th globally. The capital suffered more from the pandemic as startups preferred Lagos due to its economic wealth and population.

Similarly, Port Harcourt decreased by 6 spots to 906th while the newest Nigerian city in the rankings, Enugu, ranks 978th globally and 5th nationally. Benin City has increased 9 spots to 979th, while Kano jumped 14 spots to 981st.

In Nigeria, the high investment activity reflected in the index. The creation of new unicorns like Flutterwave and the entry of Global Fintech like Stripe with the acquisition of Paystack showed growth in the ecosystem.

However, Nigeria faces some major challenges, such as a lack of financing options, harsh regulatory conditions, and even a lack of broadband internet infrastructure.