The tech space globally is ever-changing and sometimes unpredictable due to its ups and downs. In 2022, the tech funding landscape was rocked by several setbacks, especially the global economic downturn, which forced venture capitalists to rethink their investment priorities. For example, Europe’s tech industry lost more than $400 billion in value this year, according to venture capital firm Atomico.
Regardless, as the tech space continues to evolve and disruptive innovations spring up now and then, investors need to understand the dynamics to put their money in the right places.
In this piece, we highlight the most promising tech sectors for investors to look out for as we head into 2023. Here we go!
The pandemic paved the way for food-focused startups as the demand for food delivery hit its highest levels. With restaurants temporarily closed due to national lockdowns, people had no other choice than to have their food delivered to them.
Though the world has moved on to the post-pandemic era, the request for food delivery services via mobile apps stayed. In Nigeria, the country’s young population and rising smartphone penetration are the major drivers for the food delivery space.
Projected to reach over $1 billion in revenue this year, Nigeria’s online food delivery market overflows with potential, evident in the rise of apps like Jumia Food, Bolt Food, and GoodFood — all of which combine cutting-edge technology and logistics to provide services to their customers. Glovo, Chowdeck, and FoodCourt would later appear, posing interesting numbers. Chowdeck, for instance, reportedly processes more than 800 deliveries daily with $156k monthly GMV and $35k monthly revenue.
The point is that food delivery platforms are here to stay, and with the specific demand for food as a basic need, they are poised to record more growth in 2023 and beyond. Investors surely do not want to miss out.
Related article: These tech companies impacted the streets in 2022.
In recent years, gaming has transformed from a mere recreational activity to a fast-growing monetized industry. Statista says the global eSports market was valued at just over $1.22 billion in 2021.
Being a sports-crazy country with a vast population, Nigeria has one of the largest gaming markets on the continent, thereby presenting eSports as a landmine that investors can tap into. eSports offers several opportunities to make money for both gamers and investors.
Revenue streams from eSports are similar to those from regular sports. These include sponsorships, advertising, ticket sales, media licensing, betting, etc. The mobile gaming market in Nigeria could be worth $123 million by 2023, according to Statista.
Little wonder that the sector has attracted much more interest in recent years. For instance, Gamr, an eSports tournament aggregation platform founded in 2021, allows gamers to interact with each other and enables tournament organizers to host events. The startup got selected for the second cohort of Google’s Black Founders Fund. Kon10dr, another eSports gaming platform founded by Nigerian musician Dr. Sid, hosts and organizes premium esports gaming tournaments.
Coming on the heels of the boom occasioned by the pandemic, the edTech sector in Nigeria is ever-growing. During the lockdown, Nigeria — like the rest of the world — turned to digital solutions to keep education going. Since then, several edTech startups have continued to spring up to solve the country’s educational problems.
For example, the Nigerian edTech startup Ulesson leverages the best-in-class teachers, media, and technology to create high-quality, affordable, and accessible education for students. AltSchool Africa, another edTech, is helping young Africans kickstart a career in tech through its year-long training programs and places them in international companies.
Though the Nigerian edTech space hasn’t recorded a funding boom yet, the point here is that a huge market exists. Expectedly, Nigeria’s large population means a large appetite for various modes of knowledge acquisition. For context, Ulesson became Africa’s most-funded edTech platform last year after it raised $22.5 million across 2 funding rounds.
Experts have since argued that if existing issues — especially around infrastructure and policy frameworks — are addressed, chances are the sector will produce another unicorn in the coming years. Recall tech talent outsourcing company Andela was valued at $1.5 billion at the beginning of the year.
Undoubtedly, 2022 was a turbulent year for the global crypto space as investors/traders witnessed the total crypto market capitalisation fall from about $2.2 trillion at the beginning of 2022 to $810 billion towards the year’s end.
The infamous collapse of the world’s second-largest crypto exchange FTX is a significant upheaval that hit the crypto space in 2022, raising serious questions about the need for regulatory frameworks to protect investors’ money.
But on the flip side, cryptocurrencies remain a good asset class for investment, with the ability to recover losses and hit record highs in the long run. It’s hardly a surprise that more people across the globe have taken an interest in the crypto market, despite its much-talked-about volatility.
According to a recent survey that polled more than 40,000 people globally, nearly 40% of respondents indicated a plan to purchase cryptocurrencies such as Bitcoin next year. In this article, you can read more about the cryptocurrencies to watch out for in 2023.
On the home front, Nigeria is the largest crypto-trading country in Africa, with a trading volume worth over $760m in 2021. About 27% of Nigerian Internet users own cryptocurrency data, according to a recent report by Finder.com. Even though the Nigerian government — through the Central Bank of Nigeria (CBN) — had banned cryptocurrency-related activities, Nigerians have continued to engage in them.
A recent report by CoinGecko revealed that Nigeria is the most crypto-curious country globally, demonstrating Nigerians’ ever-growing interest in crypto. In September, Nigeria began an early-stage discussion with cryptocurrency exchange Binance to develop a crypto-friendly economic zone that will support crypto and blockchain-related businesses in the region.
More interestingly, a new bill that recognizes the legal acceptability of Bitcoin (BTC) and other cryptocurrencies as capital for investment is currently in the works in the Nigerian legislature.
Read more: 5 cryptocurrencies to watch out for in 2023.
Touted as the next big thing for the crypto space, Web3 represents the next evolution of the internet that will fundamentally change how we engage with each other. According to Business Insider, Web3 is the new iteration of the World Wide Web that hosts decentralized apps on Blockchain technology.
The catch here is that Web3 is being built, operated, and owned by its users, which puts the power in the hands of individuals rather than corporations who have currently monopolized the internet.
Data has shown that interest is gradually shifting to this emerging concept in the wake of the troubles that rocked the global crypto space in 2022.
The global web 3.0 blockchain market is expected to reach $12.5 billion by 2028. Recently, the Spanish top-flight league La Liga announced plans to implement a system of tracking balls used to score goals using Web3 technology.
Though the evolution of Web3 remains underway, Nigeria — like the rest of the continent — is positioned to tap into its potential. In October, Nigeria’s Vice President Yemi Osinbajo said the country is “better positioned to be a significant player in Web3”.
Startups like Lazerpay, Fincra, Nestcoin, and others are at the forefront of the Web3 revolution in Nigeria and Africa. At Technext Coinference 2.0, the largest blockchain gathering in Africa, held in October, speakers emphasized the endless opportunities that Web3 brings to the table.
For one, the Nigerian tech ecosystem has immense potential and exciting opportunities for investors. With disruptive technologies and more startups with significant innovations sure to emerge, the space no doubt holds more incredible promise for the future.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!