Next Wave: Can also soundless Nigeria’s startups bear in suggestions itemizing on its inventory alternate?

First printed 7 January, 2024

Ever for the rationale that Nigerian Stock Alternate Group (NGX) secured regulatory acclaim for the NGX tech board from Nigeria’s Securities and Alternate Commission (SEC) in 2022, it has been very obsessed with getting tech startups within the country to checklist.

Temi Popoola, the recent neighborhood managing director/CEO of the NGX, has been the significant man in entrance of that marketing campaign. At the end of 2023, Popoola became appointed neighborhood managing director/CEO, changing a retiring Oscar Onyema , the identical old GMD of the demutualised Nigerian Stock Alternate Group (NGX). The rightness of this appointment might presumably had been cemented by the moves Popoola made in 2023 whereas he became acting CEO.

Popoola’s mission at the Nigerian bourse is pushed primarily by two foremost targets. The first is to true tech shares on the NGX Tech Board, and the 2d is to originate the market to institutional and retail traders.

Popoola came shut to those targets in 2023, securing three listings remaining yr—Mecure Industries; Nigeria Infrastructure Debt Fund (NIDF); and VFD Group, a Lagos-based fully funding company. All three listings contributed about ₦179 billion to the alternate’s market cap in 2023. In point of fact apt one of many three listings, VFD Group, represented a milestone because in 2021 it invested a entire of $35.6 million into three companies , including Piggytech (Nigeria’s main savings platform). Securing this itemizing manner that 2024 might presumably well gape more tech companies cosy up to the alternate.

A impasse on first try

In a country that has produced over 400 tech startups, the NGX tech board is eyeing the likes of significant gamers or tech unicorns cherish Jumia, OPay, Interswitch, Flutterwave and Andela to prepared the ground in itemizing on the inventory alternate.

In September 2023, Popoola flew to New York to bear a sit down-down with Nigeria’s minister of communications, innovation and digital financial system, Bosun Tijani; Flutterwave CEO, Olugbenga Agboola; and the CEO of Chapel Hill Denham, Bolaji Balogun to chat in regards to the possibility of Flutterwave itemizing on the inventory alternate. The meeting became no longer broadly publicised, but there is a viewing link to it. Top of the agenda at that meeting became a plea made by Popoola to Flutterwave to checklist. He even supplied a naira itemizing to win the tech company to checklist. Flutterwave has but to develop any commitments to the bourse.

To checklist or no longer?

It is easy to win scared in regards to the a large different of things that might presumably scramble sinister if a tech company goes to the IPO market. Whether a itemizing happens on the NASDAQ or NGX, inventory prices can tank. Jumia’s shares plummeted in 2019 and it is far soundless chasing a comeback on the New York Stock Alternate (NYSE) to the initial rate of $14.50 apiece it listed with. Egyptian-born and UAE-based fully mobility startup, Swvl, persevered a the same rocky initiating when it listed on the NASDAQ; its inventory rate fell by Ninety nine% after itemizing at $9.95 per part. Its recent correct fortunes bear seen the inventory rate rebound to $3, after it posted its first income in its H1 2023 results.

At the identical time,tech companies are often enthusiastic to dwell private firms, because it protects them from being publicly-listed and simply investigated.

However there is formulation to develop from itemizing on the Nigerian Tech Board.

Since 2020, Nigerian equities bear supercharged the funding ecosystem. In that identical yr, Bloomberg named the alternate as the most productive-performing inventory market from 93 world indexes. The fashion has persevered upward since then. Publicly on hand knowledge reported by TechCabal on Friday confirmed that the inventory market has consecutively opened the New Year since 2021 on a high. All over remaining yr, the Nigerian inventory alternate recorded a forty five.9% increase, pushed by oil, gas, banking and tech shares. Around September remaining yr, recent conversations in private areas had been that must you put ₦1 million in any tech inventory, you are going to win a minimal of ₦5 million, if no longer more. Final yr, the part prices of three publicly-listed Nigerian tech firms—Chams, eTranzact and CWG—had been up over 700%, per one more TechCabal file. This recent yr week alone, the Nigerian inventory market grew 6.54% to shut at a recent all-time high of seventy nine,664.66 capabilities.

Even supposing the inventory alternate experienced delistings remaining yr, it soundless doesn’t diminish the total determined evidence showing that a bull flee has been on for the rest three years; there’ll constantly be up and down instances within the inventory market.

Accomplice Allege material:
WeTech, the neighborhood for ladies folk in Nigeria’s tech ecosystem hosted their first conference earlier this month. Here’s what it became all about.

Since tech is commonly touted as the “recent oil”, a itemizing by tech companies on the NGX Tech Board is commonly a accumulate-accumulate that many tech unicorns in Nigeria need. Extra importantly, with Popoola at the helm, there is renewed hope for the tech board which will bring more foreign, institutional, and retail participants to the market.

Joseph Olaoluwa,

Senior Reporter, TechCabal.

Actually be at liberty to e-mail joseph.olaoluwa[at]bigcabal.com, with your suggestions about this edition of NextWave. Or correct click acknowledge to part your suggestions and feedback.