Add Row 
Add 
Crisis despite Crypto Boom: Nigeria's Web3 Startups Struggle
In Nigeria, where over 25 million individuals have embraced cryptocurrency, particularly stablecoins like USDT for their daily transactions, the growth should indicate a flourishing startup ecosystem in the Web3 sector. However, a stark contrast exists as Web3 startups face dwindling funding. Reports reveal that these ventures raised just $20 million in 2024, experiencing a significant drop from $22 million in 2023, reflecting a discouraging trend that hasn't been seen since 2021.
Understanding the Disconnect Between Demand and Funding
This paradox presents a critical inquiry: why is local interest in crypto rising while investor confidence declines? Overall, African startups raised $2.2 billion in 2024, a 25% drop from the previous year, indicating broader investment hesitance. While the decline in funding engulfs various sectors, the Web3 arena bears the brunt of it.
Investors Shift Focus: Infrastructure Over Finance
Interestingly, some areas within Web3 are witnessing growth. Investments in blockchain infrastructure projects remain healthy, with over half of the funding in 2024 directed towards these initiatives. For instance, successful projects like Zone, a payment processor, attracted $8.5 million in funding. In contrast, once-popular Web3 finance platforms like decentralized exchanges and finance applications have experienced diminished activity.
How Local Startups Adapt to Investor Wariness
Amid investor caution, initiatives from firms like Crypto Valley VC (CV VC) reflect a new approach. They are shifting towards supporting early-stage Web3 startups through ecosystem grants, enabling them to navigate and grow in the Web3 landscape. For example, Jamit, a decentralized podcasting platform, received support from CV VC's accelerator program, receiving $135,000 to foster its growth.
Emerging Trends: The Future of Web3 in Nigeria
The evolving landscape poses questions about the future of Web3 in Nigeria. With grassroots innovations gaining traction, it remains essential for these startups to build a robust community and demonstrate their market viability. The key may lie in proper mentorship and strategic investments that connect innovative ideas with larger ecosystems.
Even with current challenges, the natural synergy between AI, fintech, and blockchain innovations could prompt a renaissance in Nigeria's startup scene. Stakeholders in the tech ecosystem should leverage the existing interest in digital currencies, ensuring that the integration of these technologies acts as a catalyst for economic growth.
Add Row 
Add 
Write A Comment