74% of Nigerian tech startups maintain US ties – Report

Illustration showing Technology.

A new report has revealed that 74 per cent of Nigerian companies maintain ties to the United States, predominantly for corporate incorporation and fundraising.

The newly released report by TLP Advisory, titled ‘Home & Away: Tracking African Tech’s Global Footprints,’ which was presented to the public in Lagos on Saturday, shows that while Nigerian tech startups pulled in $572m in 2025 – accounting for roughly 14 per cent of the continent’s total venture funding-currency depreciation, limited domestic exit options, and investor mandates are forcing many founders to look outward for survival and scale.

“Although the US is the most common destination for Nigerian companies’ foreign affiliations, with 74 per cent maintaining ties there, their UK ties more often involve operations and licensing,” it noted.

The report examined 100 technology companies across six African markets: Nigeria, Kenya, South Africa, Egypt, Ghana and Morocco, exploring why they chose affiliations with the UK, US and UAE and what these relationships could enable them to do.

It found that the US is primarily associated with financing-linked incorporation, while the UAE serves as a base for on-the-ground operations and access to the wider Middle East. The UK stands out for combining these elements with a broader business presence, including regulatory licensing and commercial activity.

It added that unlike the US, where 81 per cent of affiliations are strictly for holding structures, UK and UAE connections heavily involve operational expansion, licensing, and regulatory engagement.

Among companies with UK affiliations, 84 per cent incorporated there, 47 per cent have an operational presence, and 19 per cent hold regulatory licences. By comparison, regulatory licences are held by just three per cent of US-affiliated companies and four per cent of UAE-affiliated companies.

The motivation is starkly economic. Following the Central Bank of Nigeria’s exchange-rate reforms and unification of windows starting in June 2023, the naira moved from roughly N461 to the dollar to about N1,540 by early 2025, before closing the year around N1,450. With 76.5 per cent of funded Nigerian startups raising capital in US dollars while generating revenues in naira, currency volatility has intensified the burden of dollar-denominated obligations.

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The report highlights a defining characteristic of Nigerian innovation: while the operational heartbeat, engineering teams, and customer base remain firmly anchored at home, corporate ownership and capital-raising structures are increasingly moving to global destinations like the United States, the United Kingdom, and the United Arab Emirates.

The Founder and CEO of Flutterwave, Olugbenga Agboola, stated, “Africa was always going to be home. It was where the problem existed, where our customers were, and where we believed we could make the greatest difference. But we also understood quite early that building a business of this scale would require access to capital, talent, and opportunities beyond Africa.

“Having revenue across different markets and currencies has helped us manage some of those risks. It has given us greater flexibility and helped us continue investing in our African operations even during challenging economic periods.”

While setting up an overseas holding entity or executing a “corporate flip” helps satisfy international investors and provides legal predictability, experts warn against premature expansion.

The Head of Growth at Moniepoint Group, Dolapo Omotoso, emphasised the high operational costs and rigorous compliance requirements of breaking into Western markets like the UK.

“The success stories leave out just how expensive expansion actually is. The initial capital investment and customer acquisition costs can be massive. If you launch on an unsustainable footing by running aggressive promotions, you can burn through finances very quickly.

The Head of Middle East & Africa, Primary Markets at the London Stock Exchange, Abi Ajayi, explained: “London sits between developed and emerging market investors, and that’s its competitive advantage. A founder can reach specialist emerging-market funds, frontier-market investors, sovereign wealth funds and mainstream institutions through a single ecosystem. We want African founders to see London as more than a place to list. It’s a place to access capital at every stage of their growth.”