A significant awareness gap is preventing Nigeria's promising technology startups from listing on the local stock exchange, according to a groundbreaking report from TLP Advisory. The study reveals that despite the launch of the NGX Technology Board in 2022, not a single tech company has listed to date, threatening local wealth creation in Africa's largest economy.
Key Findings from the TLP Advisory Report
The report titled "Rethinking Funding & Exits: Nigeria's Missing IPOs and the NGX" uncovers startling statistics about founder perceptions and market realities. Fifty-three percent of surveyed founders admitted they lack sufficient awareness about the NGX listing process, creating a fundamental barrier to local public offerings.
Exit preferences further complicate the landscape, with nearly half (46%) of founders favoring acquisition exits compared to only 21% who would consider Initial Public Offerings. Among those open to IPOs, many aspire to list on foreign exchanges rather than the local Nigerian market.
Structural Challenges and Currency Mismatch
The report identifies a critical structural issue: 77% of funded Nigerian startups raise capital in US dollars while earning revenue in naira. This currency mismatch creates inherent tension that makes offshore exits more attractive for venture-backed companies.
Additional market frictions include compliance costs and potential undervaluation, cited by 26% of founders, while 16% highlighted limited market liquidity as a primary concern. Despite these challenges, the report reveals encouraging sentiment, with 42% of founders expressing willingness to consider NGX listing under improved conditions.
Pathways to Solutions and Market Reform
Odunoluwa Longe, Co-founder of TLP Advisory, emphasized the need for coordinated action during the report launch at the Africa Prosperity Summit. "The issue isn't founder ambition or rejection of the NGX; it's a disconnect propelled by information gaps, perceived illiquidity, and currency mismatch," Longe stated.
The report benchmarks Nigeria against six peer markets—South Africa, Kenya, Egypt, Ghana, India, and Brazil—as well as established exchanges like the UK's Alternative Investment Market and US NASDAQ. India's successful mobilization of domestic capital, supported by pension reform, is highlighted as a practical blueprint for Nigeria to adapt.
Key Recommendations for Stakeholders
TLP Advisory proposes four critical areas for intervention to bridge the gap and unlock Nigeria's capital markets for tech startups:
Enhanced Education & Awareness: Continuous engagement through roadshows, workshops, and practical playbooks to equip founders and investors with necessary knowledge.
Regulatory & Listing Framework Reforms: Simplifying requirements and documentation while maintaining transparency and investor protection.
Market Liquidity & Investor Participation: Strengthening liquidity through market-making mechanisms and broader institutional participation.
Addressing Currency Mismatch: Deepening local capital pools and exploring dual-listing partnerships with international exchanges.
Adewale Yusuf, Founder and CEO of AltSchool Africa, reinforced the need for proactive engagement: "The NGX needs to actively engage founders and use them as channels to show what's possible on the exchange."
The comprehensive study represents the first Nigeria-focused assessment of startup readiness for local listings and draws on insights from key industry figures including Jude Chiemeka of Nigerian Exchange Limited and investment principals from Ventures Platform and LoftyInc Capital Management.
