Why Nigerian Startups Experience IPO Hurdles Despite Successful Fundraising

The local Initial Public Offering for Nigeria’s startup has become a headache for Africa’s largest economy, despite the country’s ecosystem having grown at an extraordinary pace in recent years, fuelled by record fundraising rounds.

In recent years, the country has experienced an emergence of unicorns and increasing regional expansion across Africa.

Despite the Nigerian Exchange (NGX) launching a dedicated Technology Board in 2022 to attract high-growth tech companies, the platform remains without a single listing in 2025.

A new report by TLP Advisory titled “Rethinking Funding & Exits” paints a glaring picture for this kind of a persisted hurdle, and it draws insights from founders, investors, and capital markets operators—alongside a survey of 36 startups.

One of the central issues is a currency mismatch. A significant share of the country’s startups raise capital in U.S. dollars but generate their revenue primarily in the local currency, the Naira. This imbalance complicates valuation, heightens exchange-rate risk, and discourages founders from considering NGX as a viable exit route.

Market liquidity represents another major obstacle. With no historical record of successful tech IPOs in Nigeria, founders remain uncertain that public-market investors can absorb large volumes of shares or offer pricing that reflects the true value of fast-growing digital firms.

The report also reveals a widespread lack of clarity around listing processes. More than half of surveyed founders admit they do not fully understand the steps, costs, or timelines involved in going public.

Compliance demands such as the ₦50 million threshold for the NGX Growth Board and ₦420 million for the Technology Board add further layers of uncertainty.

According to TLP Advisory, addressing these gaps is crucial if Nigeria intends to keep a significant portion of startup value creation within its borders rather than seeing exits executed offshore or through foreign acquisitions.

An African Context

Across Africa, startups have become engines of digital transformation, but the continent still struggles to close the loop between innovation, growth, and local wealth creation.

While African entrepreneurs excel at ideation and market penetration, the “exit culture” remains  a painpoint, limiting the recycling of capital that powers mature ecosystems.

In many African markets, the absence of domestic IPOs means that founders, employees, pension funds and retail investors rarely share in the long-term wealth generated by homegrown technology businesses.

Unlike in the U.S., where tech IPOs fuel retirement funds, or in China, where local markets anchor national champions, African exchanges have not yet become the natural home for scaling digital enterprises.

Also Read: Government Explores IPO for Kenya Pipeline at NSE

This creates a phenomenon where Africa produces globally admired startups but captures only a fraction of their economic value domestically, a challenge that Nigeria’s Technology Board was designed to address.

A Moment of Opportunity

The TLP report suggests that Nigeria has already charted a path for its policy direction, market demand, and investor appetite, but must rework its capital-markets infrastructure, which lags behind the dynamism of the country’s tech sector.

Founders surveyed said they are not opposed to listing locally but are rather discouraged by limited liquidity, opaque valuation frameworks, and the perceived complexity of NGX listing rules.

To shift this trajectory, the report proposes a roadmap that includes deeper engagement between NGX and the tech ecosystem, as well as simplified and better-communicated listing requirements.

They also said the country must provide clearer educational materials for founders and a stronger institutional investor participation to enhance liquidity.

Countries such as India, Brazil, and South Africa experienced a rise in tech IPOs after implementing targeted reforms that aligned their exchanges with the needs of modern digital companies.