The global startup ecosystem went through a “funding winter” this year.
Among other factors, the inflow of venture capital dropped significantly , making it particularly difficult for startups to raise funds.
Startups all over the world experienced many challenges in 2023 and some are still going through a funding dry spell.
Funding winter is caused by a number of factors including market insecurity, a global economic downturn, shifts in industry focus, or simply a lack of interested stakeholders.
This has caused several companies across Africa and even globally to collapse this year. As such, the serial startup shutdown is not peculiar to Nigerian startups.
While Nigerian startups have made a name for being Africa’s North Star, the country also has the highest number of shutdowns in Africa this year.
Nine Nigerian startups have closed down this year accounting for over $70 million in funds raised over the last 2 years, gone down the drain.
The lost Startups of 2023
Pivo
A Nigerian fintech that offered banking services to small supply chain businesses.
Two months after launch in July 2021, Pivo raised a $100,000 pre-seed round from investors.
It later raised a $2 million seed round in November 2022. The startup announced it was shutting down in December 2023, 2 years after launch.
Lazerpay
Lazerpay, a web3 crypto payments company founded by 19-year-old Njoku Emmanuel raised $1.1 million. However, the expected additional investment did not come.
On April 13, 2023, Lazerpay announced it was shutting down.
54gene
54gene, was a genomics research company that had raised US$45 million across three funding rounds.
Less than four years into its creation, the company had administrative problems . Over the past year, 54gene had three CEOs. A venture capitalist hinted that “the need to survive pushed them towards unethical practices.”
The company started winding down in July and completely powered down in September 2023.
Bundle Africa
Nigerian crypto startup, Bundle Africa announced that it would shut down its social payment app after it had raised $450,000 in a pre-seed from two investors.
CEO Emmanuel Babalola said that the shutdown was a decision made by stakeholders for restructuring the company.
Bundle Africa announced closure in July 2023, but catered to users withdrawing funds till 30th of August 2023.
Payday
Fintech company Payday, ran into problems barely 6 months after raising $3 million in a seed round led by Moniepoint.
The company’s founder and CEO, Favour Ori, was alleged to be paying himself a monthly salary of $15,000 at the expense of the company’s survival while employees were made to take pay cuts.
Bitmama Inc. acquired Payday in December 2023.
Zazuu
Zazuu, a fintech company was founded in 2018 by four Nigerian entrepreneurs, Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO) and Tola Alade (CDO).
The company, in July 2023 raised $2 million from Angel Investors and announced closure on November 17, 2023.
The firm’s management attributed the shutdown to its inability to secure additional growth funding from investors.
Vibra
A Nigeria-based crypto trading app created by the African Blockchain Lab.
The startup raised $6 million in Dec 2021 in a pre-Series A round.
Co-leading the funding Series was a consortium of global investors, ( including African venture capital firms Lateral Frontiers VC, CRE Venture Capital and Musha Ventures,) as well as international blockchain investors. ( Dragonfly Capital, Hashkey Capital, SNZ Capital, Fenbushi, Cadenza Capital, Head & Shoulder X, LeadBlock, Hash Global, Bonfire, Krypital, Despace and more.)
The company shut down in July this year, not only in Nigeria but also in Kenya and Ghana.
Okadabooks
A pioneer in digital publishing and bookselling Founded in 2013, Okadabooks was among 12 startups selected for Google’s Launchpad Accelerator Africa class of 2017. Okadabooks provided over 40,000 original books and had over 400,000 registered readers.
OkadaBooks closed down on November 30th 2023, after 10 years of operation citing rough macroeconomic conditions.
Hytch
Hytch Was a Nigerian logistics startup which shut down barely nine months after launch.
The closure came after it failed to secure further funding. The startup announced closure on Feb 2, 2023.
Other African startups that have shut down in 2023 include;
- Sendy (Kenya) – August 2023
- Dash (Ghana) – 0ctober 2023
- WhereIsMyTransport ( South Africa) – October 2023
- MarketForce (Kenya) October 2023, shutdown 3 of 5 markets
- Zumi (Kenya) – March 2023
- Copia (Kenya) – April 2023, shutdown Ugandan operations