Despite Nigeria being one of the top startup destinations in Africa, the startup ecosystem is mostly clustered in Lagos. For a number of reasons, Nigeria’s largest city, Ibadan is on its way to becoming the country’s next big tech ecosystem.
With a massive consumer market and more than 500 active startups, Lagos is one of the largest startup ecosystems in Africa. However, new developments show that Ibadan is quickly rising to become the next big ecosystem.
For instance, this week alone, the Nigerian Communications Commission (NCC) donated a 500 million Naira Information and Communication Technology (ICT) park to the city.
According to the Chairman of the Board of Commissioners of the NCC, Prof. Adeolu Akande, the parks would serve as commercial hubs for the ICT capacity building and digital skills, create employment and entrepreneurial activities, and facilitate smart city deployment in the city.
While this calls to mind the new reality, the ICT park is not the only reason Ibadan is the new destination. Here are several other indications that the city has the required conditions to increasingly attract startup founders and talents. T
he two key indices, other than investment.
Ibadan overtakes Abuja to become Nigeria’s 2nd largest startup ecosystem
This year, Ibadan saw a major boost in Startup Blink ecosystem ranking. According to the report, the city saw a massive increase, jumping 601 spots to 353rd globally and overtaking the Nigerian capital, Abuja, to become the 2nd in Nigeria.
The Oyo state capital had a score of 0.688 which is several points higher than Abuja’s 0.419. However it is still very far from Lagos at 4.693.
The improvement in the city ranking can be attributed to several factors one of which is the business friendliness that has increased in the city.
With Lagos’ regulatory landscape becoming more hostile to growth, some startups have turned to the friendly regulations of the Seyi Makinde led government.
A notable example is the launch of African ride hailing company, Safeboda in the city after Lagos banned ride-hailing operations. The subsequent successes of the company in Ibadan illuminated its potential as other ride-hailing companies like Gokada have already revealed plans to launch in the city.
Before expanding into Ibadan, Safeboda raised an undisclosed amount in Series B with which it drove its eventual expansion into the city.
Recently, Agrodata, an Ibadan based Agrotech company, was among 5 Nigerian Startups Selected for the $750,000 Telecel Africa Startup Initiative Program (ASIP). The program is an accelerator powered by Startupbootcamp AfriTech.
Aside from that, there are also other startups like TomX credit that have raised undisclosed sums to help provide loans for businesses in the city.
Low cost business operation
Lagos can be a real hustle for digital businesses, with startups having to deal with everything from transactional government policies to poor transport infrastructure and unreasonably high operating costs.
Things are different in Ibadan. According to former country manager at Safeboda, Babajide Duroshola, starting out in Ibadan didn’t bring up too many issues for Safeboda.
He says smartphone adoption is very high in the city and people understood how to work with basic apps.
Talking about the cost of running a business, Babajide revealed that it was much cheaper. He explained that you can actually put up a billboard in Ibadan for as low as ₦50,000 compared to hundreds of thousands charged in Lagos.
Ibadan has a large supply of budding talents and developers
The availability of quality talent is important for startups building a base in any city. According to a recruitment expert, Ibadan is a very educational city, so it’s very easy to get really good entry-level talents, brush them up and train them till they have a good understanding of the business, how to build operational processes and stuff like that.
Babajide in a chat session also revealed that developers are now settling down in Ibadan to avoid the high cost of living in Lagos.
“I remember at some point when Andela went fully remote, I knew some of the developers who started moving to Ibadan because it gave them a better quality of life. They were able to get better houses, good food and live a better quality of life compared to Lagos.”
Asides from that, he revealed that the city is a viable market filled with highly intellectual people.
“You look at Ibadan and it is one of the most educated cities in Nigeria. You have the University of Ibadan (UI) there, then the University College Hospital (UCH) as well. It’s a city that isn’t so commercial but still has that viability especially because it is close to a commercial city.”
Lagos undoubtedly remains Nigeria’s biggest market for digital businesses. But it is no longer the only viable one.
Ibadan is quickly evolving to the next big ecosystem with growing infrastructure, friendly government policies, improving internet speed, access and connection, and a host of other systemic solutions that are arising to solve major challenges affecting the startup ecosystem in the city.
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