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‘Dearth of local funding for tech startups may shift operators’ focus abroad’

Recent African Tech Startups Funding Report released by Disrupt Africa, have revealed that the number of African tech startups that raised funding from offshore increased by 32 per cent to 210 in 2018, and the total amount raised jumped by a whopping 71.5 per cent to the record yearly figure of $334.5 million.
However, experts are expressing fears that considering the fact that majority of the funds flow in from abroad, benefiting startups may begin to focus on innovative products that befit their foreign financiers.
According to Dr ken Igboanugo, a development economist, he said the inability to get strong local funding for startups is breading another form of brain drain as the fund beneficiaries are bound to tailor their product developments to innovations that are salutary to the aims of their financiers.
“Recall that who pays the piper dictates the tune for the music and no foreigner can give you fund to develop products that will not benefit his or her organization or interest at least.
Dr Igboanugo added that “In so far major funding startups remain offshore, it will take time for local digital products developers to come with innovations that will serve the aspirations of the economy and Nigerians in particular”.
It would be recalled that while local funding for the sector dropped, offshore inflows jumped to $95m within the period under review.