LAGOS: THE NEXT SILICON VALLEY

Nigeria 2018 | TELECOMS & IT | FOCUS: TECH START-UP HUB

Many cities, including Lagos, are looking to replicate Silicon Valley's magic formula and become the tech start-up hub of the future. Lagos remains the underdog, for now.

Cities across the globe are looking for the ingredients and perfect recipe to create their own Silicon Valley, even choosing spin-off names such as Silicon Wadi in Tel Aviv, Israel; Santiago's Chilecon Valley; as well as Germany's Silicon Allee in Berlin and Silicon Saxony in Dresden. Add to the list Yabacon Valley in Lagos, Nigeria.

Recent attention from Facebook and Google has put Nigeria on Africa's start-up map. Yabacon Valley, named after the Yaba neighborhood in the country's economic and cultural capital, has worked to establish itself as Nigeria's start-up hub. Thanks to start-up Co-Creation Hub, Yabacon Valley has incubated the country's biggest start-ups.
Facebook's Mark Zuckerberg visited Lagos in 2016, and over a year later in November 2017, the CEO announced Facebook's first tech hub in Africa will be located in Lagos. Facebook's pending presence in Nigeria follows Google CEO Sundar Pichai's announcement to establish its first Launchpad space outside the US in none other than Lagos, Nigeria.
The attention from top tech CEOs mirrors the interest from investors. In 2016, Nigeria attracted more start-up funding than any other African country. According to data from Partech Ventures, Nigeria was the only African country to raise more than USD100 million, with a total USD109.37 million raised; South Africa and Kenya pulled in USD96.75 million and USD92.7 million, respectively.
In other accolades for the continent's most populated and fastest growing city, Lagos is also Africa's most valuable start-up ecosystem as measured by Startup Genome's Global Startup Ecosystem Report 2017. Valued at USD2 billion, Lagos dwarfs Cape Town's USD172-million valuation, despite Cape Town's higher number of active tech start-ups.
Lagos' strengths lie in its engineering talent, which is cheaper and has a high-level of English proficiency. Also, according to Startup Genome's 2017 report, globally, Lagos' ecosystem has the ninth-highest rate of founders with an undergraduate degree. One of Yaba's many advantages as a neighborhood is its proximity to the University of Lagos and Yaba College of Technology.
And as Africa's fastest growing city, many attribute Lagos' rise as a start-up and tech magnet to its swelling mobile use and Internet connectivity. It is no coincidence that Nigeria is both Facebook's biggest market in Africa and a location in which Google Maps service numbers doubled in the past year.
Nonetheless, Lagos still has a long way to go on the global stage. In the first half of 2017, many questioned Lagos' viability as start-up tech hub, worried that its hype was disproportionate to the reality. The average early-stage funding for a Lagos start-up is USD77,800, only one-third the global average.
Andela and Konga, arguably Nigeria's most successful start-up, moved to another Lagos neighborhood. Flutterwave, Nigeria's fintech poster child, actually operates out of San Francisco with a Nigerian team in Lekki, not Yaba. This is largely because infrastructure in Yaba is lacking, and other areas of the city offer better and/or cheaper advantages.
The World Economic Forum (WEF), in collaboration with Business Insider, ranked the top-22 cities in the world for tech. The regions of North America, Europe, and Asia Pacific boasted six cities each, and the US and Europe dominated the top 10. MENA and Africa each managed to get one city on the list with Silicon Wadi (Tel Aviv) and Cape Town.
The “next Silicon Valley" remains up for debate, and the debate does not even include an African city as an option—yet. Facebook's Zuckerberg, Google's Pichai, and investors all see something in Lagos; and, with increasing funding and attention, Yabacon Valley may one day rival Silicon Valley or the next Silicon Valley to become the next “next Silicon Valley."