Techstars, a United States venture-capital firm with over $265 million under management, said it’s seeking opportunities in Nigerian information and communication technology industries for expansion, even as lower crude prices impact growth in Africa’s most populous nation.
“Absolutely, we are interested in investing in Nigeria,” especially in firms where “there is a large software and technological component,” Jason Seats, Partner, said in an interview. “There is growing class of knowledge workers in Nigeria and
unquestionably over time the economy will become less dependent on oil.”
Seats, who was in Lagos, Nigeria’s commercial capita last month to meet business owners said the firm targets viable `start-ups’ for equity through investing in convertible debt. The company plans to make `venture investments’ out of a current fund of $155 million over next 2 to 3 years, he said. Techstars currently has a stake in a Nigerian courier and delivery service company, Seats said without giving
details.
Investors are tapping the software and technology industries of Africa’s biggest economy of over 170 million people as many businesses and individuals seek IT services. The nation launched information and communication policy in 2012 to boost
investments in the sector as well as drive growth of non-oil industries
including agriculture, manufacturing and services. It wants to increase its
broadband penetration fivefold from 4 percent of the population, according to
its National Broadband Plan for 2013-2018.
President Muhammadu Buhari whose cabinet nominations were announced last week said diversifying the oil-based economy to boost revenue will be a priority in his inaugural budget for 2016 as he seeks to save the nation reeling from Brent crude prices that have more than halved over the past year. “There is great opportunity in
building the businesses that create the rest of the Nigerian economic
picture,” Seats said.
The Boulder-based firm has made 23 “seed investments’ most of which are in US and Europe-based companies, according to Seats. “We are expanding aggressively though, and it won’t be too long before we are on the African continent,” he said.
“Nigeria has a relative and growing abundance of the most precious resource that we
invest in people.” – Agency report.
