Fresh from completing an eight-year tenure as governor of Kaduna State, Nasir El-Rufai, has announced plans to launch a $100 million fund aimed at diversifying startup investments in Nigeria beyond Lagos.
The fund, which would be run from Nigeria’s capital city of Abuja, will see the former governor put up $2 million of his personal funds and would begin operations in 2024. While El-Rufai will serve as part-time chairman of the board, Jimi Lawal, Hafiz Bayero, Eyo Ekpo, and Kabir Yabo will join the fund as directors.
Per Business Day, investors in the fund will likely be international investors who lack the time and local knowledge to participate in hands-on investing in Nigeria. The fund will be sector-agnostic, backing founders who can “add value to the world.”
El-Rufai will be drawing on his immense political connections gained over nearly three decades to help startups navigate regulatory waters and access capital.
“What young people need is essentially mentoring and financing to get things going. They develop the idea and see whether it is viable. And we will open doors for them because they don’t have contact. They don’t know or have access to ministers, presidents, or regulatory agencies. We do. We know the minefields that they have to navigate,” he said.
This announcement comes amid a resurgence of efforts to drive development in northern Nigeria. Last month, Surrayah Ahmad and Sanusi Ismaila announced a $20 million fund to invest in the region’s founders. The fund would invest up to $200,000 in startups across Africa but would allocate more than half of its investments to the region.
The Goal of the Venture Capital
Aimed at bridging the gap in investment opportunities in the region, the fund will provide mentorship and fundraising support for portfolio companies.
Ahmad’s conviction in beginning the fund stems from the large population and growing broadband connection. It is also fuelled by her experience building and selling YDS Africa and the success of startups like Sudo Africa, a fintech startup that raised $3.7 million in 2022.
Similarly, Kaduna State became the first Nigerian state to domesticate the Nigerian Startup Act, signifying the government’s intent to spur the growth of tech-enabled businesses.
As investment sources dry up for African startups, the launch of these funds targeted at a region that has often been defined by insurgency is good news not only for the region, but for the country and Africa at large.
