Nigeria’s technology ecosystem is expanding rapidly, yet new research shows that the local capital markets have not kept pace. According to TLP Advisory’s latest report, “Rethinking Funding & Exits: Nigeria’s Missing IPOs and the NGX,” a significant awareness gap is preventing Nigerian startups from leveraging the Nigerian Exchange (NGX) as a viable route for growth and exits. The findings highlight structural challenges, currency mismatch issues, and market frictions that collectively hinder Nigeria’s ability to build a robust pipeline of local IPOs.
Lack of Awareness Limits NGX Tech Listings
The report identifies a striking knowledge gap: 53% of founders lack sufficient awareness of the NGX listing process, despite the launch of the NGX Technology Board in 2022. This lack of clarity significantly reduces interest in pursuing local IPOs, even as Nigeria positions itself as Africa’s leading startup hub.
Exit preferences further illustrate the trend. 46% of founders prefer acquisition exits, while only 21% would consider IPOs — and many of those prefer foreign exchanges with deeper liquidity and global visibility.
Currency Mismatch Pushes Startups Toward Offshore Exits
A major structural tension highlighted in the report is that 77% of Nigerian startups raise capital in dollars but earn revenue in naira. This currency mismatch incentivizes offshore exits, as foreign listings and acquisitions offer more alignment with investors’ expectations and financial structures.
Additional market frictions include:
- 26% citing compliance costs and potential undervaluation
- 16% citing liquidity concerns on the NGX
Despite this, there is notable optimism: 42% of founders would consider listing locally if reforms and improved awareness initiatives are introduced.
Founder and Stakeholder Perspectives
Speaking at the report launch during the Africa Prosperity Summit (APS), hosted by Ventures Platform, Odunoluwa Longe, Co-founder of TLP Advisory, said:
“Nigeria’s startups have proven they can build globally competitive businesses, but too much value still flows offshore because viable local exit routes are limited. Our report shows the issue isn’t founder ambition or rejection of the NGX; it’s a disconnect propelled by information gaps, perceived illiquidity, and a currency mismatch that makes dollar-denominated exits more attractive for venture-backed companies. With clarity, practical education and confidence-building — and by aligning regulators, founders, investors, and policymakers — we can turn the NGX into a genuine platform for growth-stage innovation and long-term wealth creation in Nigeria.”
The report draws from extensive desk research, founder surveys, and interviews with key industry leaders including Jude Chiemeka (CEO, NGX), Adekunle Awojobi, Adewale Yusuf, Idris Bello, and Dolapo Morgan. It benchmarks Nigeria’s ecosystem against peer markets such as South Africa, Kenya, Egypt, Ghana, India, and Brazil, and mature exchanges like the UK AIM and the NASDAQ. India’s model of mobilising domestic capital — powered by pension reform — is highlighted as an actionable example.
Key Recommendations to Boost Nigeria’s IPO Pipeline
1. Enhancing Education & Awareness
Continuous roadshows, workshops, and practical playbooks can demystify the NGX listing process for founders and investors.
2. Reforming Regulatory & Listing Frameworks
Simplified listing requirements and improved documentation standards can make the NGX more accessible for high-growth startups.
3. Strengthening Market Liquidity
Expanding institutional investor participation, improving market-making mechanisms, and incentivizing retail investors will help create a more dynamic market.
4. Addressing Currency Mismatch
Deepening local capital pools and exploring dual or cross-listings with NASDAQ, AIM, and the JSE can reduce reliance on offshore exits.
Adewale Yusuf, Founder and CEO of AltSchool Africa, emphasized the importance of engagement:
“The NGX needs to actively engage founders and use them as channels to show what’s possible on the exchange. Local investors also need to step in. Many of us don’t fully understand the process or requirements. By putting clear structures and educational support in place, founders can see exactly what it takes to list, and confidence in the local market will grow.”
TLP Advisory’s Role in Nigeria’s Innovation Ecosystem
Launched in 2014, TLP Advisory has advised more than 250 clients in Nigeria’s technology and venture ecosystem on M&A, IP, venture financing, and international expansion. The firm co-drafted the landmark 2023 Nigerian Startup Act and supports more than 200,000 businesses through its legal-tech platform DIYLaw.
Supported by partners including Wimbart and Ventures Platform, the report serves as a call to action for all stakeholders committed to strengthening Nigeria’s digital economy.
The full report can be downloaded for free [link].
