Experts advise Nigerian fintechs on strategies to get funding amid scarcity

Experts in the financial industry have urged fintech companies in Nigeria, especially, those seeking to raise funds to prioritize profitability in their business strategies before approaching investors for funding.

This is even as they noted that the period of just pitching ideas to investors and hoping to get funding is over. The experts spoke at a 2-day TechnNovation FINTECH Conference, organized by FITC with the “Building Trust in the Digital Age: Balancing Performance with Compliance.”

Specifically, the Chief Executive Officer of Clane, a mobile payment company, Mr. Dipo Alabede, in his presentation at the conference said investors are now looking for prospects of profitability before they can commit their funds to any startup.

“Between 2020 and 2023, a lot of investors were willing to give you money for an idea, just the idea. But today, you must have a product that is in the market and generating revenue, not just revenue but enough revenue to the level of profitability,” he said.

Diversifying funding sources

In addition to building a business with prospects for profitability, Alabede advised the fintechs to diversify their funding sources, looking at a combination of venture capital and private equity, debt financing, and partnerships.

“Continue to seek traditional venture capital and private equity funding, but focus on attracting investors with experience in emerging markets and fintech.

“Explore debt financing options, including convertible notes and venture debt, to supplement equity funding without diluting ownership and partner with strategic investors who can provide not only capital but also strategic guidance, industry connections, and operational support,” he advised

While noting the crucial role of fintech in Nigeria’s economic development and financial inclusion, the MD/CEO of Digital Jewels Limited, Adedoyin Odunfa, said Nigerian fintechs would also need to balance innovation with compliance, advocating for a customer-centric approach and diverse teams.

She added that having committed individuals, robust processes, scalable solutions, and effective collaboration are key success factors that would help the fintechs scale and attract investments.

Embracing collaboration

Also speaking, the CEO of E-Settlement, Olaoluwa Awojoodu emphasized the transformative potential of AI and the need for Nigerian Fintechs to embrace collaboration despite competitive pressures.

Highlighting global AI advancements, he stressed the urgency for Nigeria to keep pace. Olaoluwa likened the industry to a forest where companies compete for resources but can benefit from underground collaboration.

He advocated for unified platforms to combat fraud, leveraging technologies like Bank Verification Number (BVN), and urged strategic collaboration to navigate challenges and seize opportunities in the evolving digital landscape.

In her address, Chizor Malize, MD/CEO of FITC and convener of the conference, emphasized the transformative impact of fintech on the global financial services industry. She cited the success stories of companies like Interswitch, Flutterwave, and M-Pesa, as examples of Africa’s potential to drive financial inclusion and economic growth through digital innovation.

Malize said it is crucial to maintain trust and compliance in the digital age, emphasizing FITC’s role in providing innovative knowledge solutions and capacity-building programs to strengthen the financial services sector.


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