Despite the huge investments made in Nigeria’s telecommunications sector, many technology startups still depend on the United States for survival, access to funding and expansion into international markets.
The growing dependence on foreign markets is exposing a major weakness in Nigeria’s technology ecosystem, where businesses may develop their products, employ skilled workers and build customer networks locally but increasingly rely on overseas corporate structures to attract investors and achieve sustainable growth.
A new report by TLP Advisory, titled Home & Away: Tracking African Tech’s Global Footprints, indicated that 74 per cent of Nigerian technology companies maintain affiliations with the United States, largely for corporate incorporation and fundraising.
The report showed that Nigerian tech startups attracted $572 million in 2025, accounting for roughly 14 per cent of the continent’s total venture funding, as currency depreciation, limited domestic exit options and investor requirements continue to push many founders towards foreign markets for survival and expansion.
“Although the US is the most common destination for Nigerian companies’ foreign affiliations, with 74 per cent maintaining ties there, their UK ties more often involve operations and licensing,” it noted.
The findings underline the growing influence of Silicon Valley and the wider American investment ecosystem on Nigerian technology businesses, particularly fintech companies seeking access to international venture capital, institutional investors and a more predictable legal environment.
The report examined 100 technology companies across six African markets: Nigeria, Kenya, South Africa, Egypt, Ghana and Morocco, exploring why they chose affiliations with the United Kingdom, United States and United Arab Emirates and what these relationships could enable them to do.
It found that the US is primarily associated with financing-linked incorporation, while the UAE serves as a base for on-the-ground operations and access to the wider Middle East. The UK stands out for combining these elements with a broader business presence, including regulatory licensing and commercial activity.
The report added that unlike the US, where 81 per cent of affiliations are strictly for holding structures, UK and UAE connections more heavily involve operational expansion, licensing and regulatory engagement.
Among companies with UK affiliations, 84 per cent are incorporated there, 47 per cent have an operational presence, and 19 per cent hold regulatory licences. By comparison, regulatory licences are held by just three per cent of US-affiliated companies and four per cent of UAE-affiliated companies.
These figures suggest that international expansion is no longer simply about registering a company abroad to attract investors. Increasingly, technology businesses are looking for jurisdictions where they can establish commercial operations, obtain licences, develop partnerships and reach new customers.
The distinction is important for Nigerian startups, particularly those operating in financial services, payments and other regulated sectors, where access to international markets requires more than a corporate registration certificate.
The motivation is starkly economic. Following the Central Bank of Nigeria’s exchange-rate reforms and unification of foreign exchange windows starting in June 2023, the naira experienced substantial depreciation, increasing the cost of servicing dollar-denominated obligations and funding overseas operations.
For startups that raise capital in dollars but generate a significant proportion of their revenue in naira, the exchange-rate movement creates a difficult financial imbalance. A company may attract substantial foreign investment, but the value of its local-currency revenue can fall sharply when measured against its dollar obligations.
The report indicated that 76.5 per cent of funded Nigerian startups raised capital in US dollars while generating revenues in naira, exposing them to currency volatility and making financial planning increasingly difficult.
This is particularly challenging for companies that need to pay for international cloud services, software licences, technology infrastructure and other operational expenses in foreign currencies while collecting payments from customers in a market where purchasing power remains under pressure.
The report highlights a defining characteristic of Nigerian innovation: while the operational heartbeat, engineering teams and customer base remain firmly anchored at home, corporate ownership and capital-raising structures are increasingly moving to global destinations such as the United States, the United Kingdom and the United Arab Emirates.
The Founder and Chief Executive Officer of Flutterwave, Olugbenga Agboola, explained the thinking behind this approach, saying that the company’s decision to establish international connections did not diminish its commitment to Africa.
“Africa was always going to be home. It was where the problem existed, where our customers were, and where we believed we could make the greatest difference. But we also understood quite early that building a business of this scale would require access to capital, talent, and opportunities beyond Africa.
“Having revenue across different markets and currencies has helped us manage some of those risks. It has given us greater flexibility and helped us continue investing in our African operations even during challenging economic periods,” he said.
Flutterwave’s experience reflects the dilemma confronting several Nigerian technology companies. While their primary markets remain in Africa, their ambitions require access to international investors, payment networks and business opportunities that may be difficult to secure through domestic structures alone.
However, the movement of corporate structures abroad raises concerns about where the long-term economic value of Nigerian technology companies will ultimately reside.
When startups establish holding companies overseas to attract foreign investment, important aspects of corporate ownership, intellectual property and future investment returns may also become linked to those jurisdictions.
TLP Advisory’s findings suggest that this trend could have implications for Nigeria’s ability to retain the economic benefits of its growing technology industry, particularly if successful businesses eventually pursue foreign listings or acquisitions instead of accessing the domestic capital market.
The absence of Nigerian homegrown fintech companies on the Nigerian Exchange Limited (NGX) is another concern. Despite the emergence of major technology businesses such as Flutterwave, Moniepoint and Paystack, the domestic stock market has yet to attract a listing from a leading homegrown fintech.
A stronger domestic capital market could provide an alternative source of funding, create opportunities for local investors to own stakes in successful technology companies and offer founders additional exit options.
While setting up an overseas holding entity or executing a corporate flip helps satisfy international investors and provides legal predictability, experts warn against premature expansion.
The Head of Growth at Moniepoint Group, Dolapo Omotoso, emphasised the high operational costs and rigorous compliance requirements involved in breaking into Western markets such as the UK.
“The success stories leave out just how expensive expansion actually is. The initial capital investment and customer acquisition costs can be massive. If you launch on an unsustainable footing by running aggressive promotions, you can burn through finances very quickly,” he said.
His warning highlights the difference between establishing a foreign presence and building a commercially successful business in a new market. Beyond incorporation, companies must invest in local personnel, marketing, regulatory compliance, partnerships and customer acquisition.
For fintech businesses, the requirements can be particularly demanding because financial services are subject to strict licensing, consumer protection and anti-money laundering regulations.
The experience of companies that have entered the UK market also demonstrates that a familiar business environment does not automatically guarantee success. Moniepoint, for instance, launched MonieWorld in April 2025 to serve the UK-Nigeria remittance corridor but subsequently discontinued the platform after struggling to establish a sustainable competitive position.
This underscores the need for Nigerian startups to conduct proper market assessments before committing substantial resources to international expansion.
The Head of Middle East and Africa, Primary Markets at the London Stock Exchange, Abi Ajayi, explained that London’s attraction lies in its ability to connect businesses with different categories of international investors.
“London sits between developed and emerging market investors, and that’s its competitive advantage. A founder can reach specialist emerging-market funds, frontier-market investors, sovereign wealth funds and mainstream institutions through a single ecosystem. We want African founders to see London as more than a place to list. It’s a place to access capital at every stage of their growth,” he said.
The United Kingdom is also using investment incentives, established capital markets and immigration programmes to attract international entrepreneurs. Its Seed Enterprise Investment Scheme and Enterprise Investment Scheme, for instance, offer tax incentives to eligible investors backing qualifying businesses.
For Nigerian founders, the attraction is therefore not limited to access to British customers but also the opportunity to build relationships with investors and institutions that can support businesses at different stages of development.
Nevertheless, the growing internationalisation of Nigerian technology companies raises an important question about the country’s own investment environment.
Nigeria has a large consumer market, a growing pool of technology talent and an established telecommunications infrastructure, but local startups still face challenges accessing patient capital, managing foreign exchange exposure and finding viable exit opportunities.
The challenge for policymakers and financial institutions is to develop an environment where Nigerian startups can raise substantial capital locally, access international markets and retain a meaningful portion of their corporate and economic value within the country.
Ultimately, Silicon Valley’s influence on Nigerian technology businesses reflects both the opportunities available in global markets and the gaps that remain in the domestic ecosystem.
For founders, international incorporation may provide the legal structure and investor confidence required to scale. But for Nigeria, the bigger task is ensuring that the businesses built with local talent, innovation and market opportunities also contribute substantially to the country’s long-term economic growth.
