When the Ground Shifts: How Nigerian Startups Are Learning to Survive Economic Turbulence

Nigeria’s tech startup ecosystem has, over the past two years, undergone something close to a stress test; one it did not entirely pass. The naira fell from around ?460 to the dollar before the June 2023 float to nearly ?1,535 by the end of 2024. According to Mustard Insights, headline inflation rose to 34.80% in December 2024, its highest level in almost three decades. Fuel subsidies were scrapped. And the capital that had poured into African tech between 2020 and 2022 tightened sharply, with investors demanding more proof and offering less patience.

The ecosystem that emerged from that period looks different from the one that entered it. Some companies folded. Others adjusted. A smaller number found ways to grow.

The Weight of a Falling Currency

For startups that had built their cost structures around dollar-denominated expenses, cloud infrastructure, foreign talent, and international tooling, the naira’s slide was not just uncomfortable. It was existential. As Afridigest reported, companies operating in Nigeria would have needed to grow their naira revenue by roughly 2.2 times in 2023 alone to break even against the currency’s decline.

Paystack responded by laying off 33 employees in Europe and the UAE in a bid to localize costs, with CEO Shola Akinlade explaining that the company was changing its operating model to prioritize placing team members within the markets they serve. Iroko TV took a different route. As CEO Jason Njoku noted, 89% of the company’s revenues for the first nine months of 2023 came from outside Nigeria, a deliberate shift that the naira’s sustained decline made increasingly rational.

Both responses reflect the same underlying logic: when your revenue is tied to a currency in freefall, you either cut costs denominated in hard currency or find new ways to earn it.

The Startups That Didn’t Make It

The downturn has also produced a string of high-profile closures that have forced the ecosystem into a more sober assessment of what actually sustains a company. MVX, a B2B platform for retailers, raised $1.3 million in 2023 but shut down by mid-2024, citing currency instability and rising inflation that made operations too costly. Edukoya, a K-12 learning app that raised $3.5 million and gained over 80,000 users, shut down in February 2025. Okra, once considered foundational to Nigeria’s open banking infrastructure, ceased operations after raising over $16.5 million but failing to secure a buyer or follow-on funding.

These failures share a recurring pattern. Startups that depended on a single investor, a single revenue stream, or a single market had nowhere to turn when conditions shifted. Lazerpay, which helped businesses accept crypto payments, shut down after its main investor pulled out during a crypto market downturn, with no backup plan or financial cushion to absorb the hit.

The lesson is not that these were poorly conceived businesses. Many were not. The lesson is that resilience requires redundancy in funding sources, in revenue models, and in geographic exposure.

What Survival Actually Looks Like

Among the startups that have navigated the downturn, certain patterns are consistent. The first is an almost obsessive focus on unit economics. Founders who previously celebrated growth charts have begun asking harder questions before launch, not after the first million burns through. As one analysis of Nigeria’s 2025 startup landscape noted, some founders now push back on feature bloat, preferring MVPs that solve one problem exceptionally well over platforms that promise everything.

The second is geographic diversification. International expansion across African markets, particularly into Francophone Africa, with its peg to the euro, has offered startups a form of protection against naira volatility that few had originally considered. Cross-border deals now represent nearly 40% of Series A rounds, and founders who think regionally from the start are closing larger rounds faster.

The third is a more disciplined relationship with governance. At a recent executive forum hosted at Flutterwave’s Lagos headquarters, NGX CEO Jude Chiemeka argued that startups without the right governance structure will lose ground to better-governed competitors in attracting funding, regardless of how strong their product is. Regulatory proximity matters too. Flutterwave’s SVP of Business Development, Oluwafunmilayo Olaniyi, advised founders at the same event to stay close to regulators, noting that policy shifts can upend an entire business model overnight.

The Funding Picture

Investor appetite has not disappeared, but it has changed shape. Debt financing surged 65% year-on-year to $1.08 billion across Africa in 2025, as startups with predictable revenue streams turned to loans rather than equity to avoid dilution, according to the Partech 2025 Africa Tech VC Report. Lenders are increasingly willing to back African startups with proven models, even as equity investors remain selective.

Nigeria’s position within the broader African funding landscape has also shifted. Nigerian startups raised $572 million in 2025, a 3% drop that reduced the country’s share of total African funding to 11%. This is a meaningful fall from the dominance it held just three years prior. Kenya and Egypt have both gained ground. But Nigeria still produced Moniepoint, which achieved unicorn status in 2024 and secured a $90 million Series C extension in October 2025, backed by Visa, Google’s Africa Investment Fund, and the IFC, demonstrating that investor confidence in fundamentals-driven, profitable companies remains intact.

A More Measured Ecosystem

There are signs that conditions are beginning to stabilize. By Q1 2025, relative calm had returned to the naira, and the improved foreign exchange liquidity, combined with stronger pricing power and cost-cutting measures, helped many companies swing back into profitability after two years of losses. Nigeria’s Economic Summit Group has projected 5.5% GDP growth for 2026, underpinned by a narrowing inflation rate expected to fall toward 16% and a more stable exchange rate environment.

The ecosystem that survives this period will not look like the one that flourished during the funding boom. It will be leaner, more regionally aware, and considerably less tolerant of business models that depend on perpetual capital infusion. That may, in the long run, be a more durable foundation than the optimism years ever built.