Focus on Profitability: Nigerian Fintech Startups Advised to Prioritize Being Profitable Before Seeking Investment/Funding
Financial experts have advised fintech companies in Nigeria, especially those seeking to raise funds, to prioritize profitability in their business strategies before approaching investors.
During the 2-day TechnNovation FINTECH Conference organized by FITC, themed “Building Trust in the Digital Age: Balancing Performance with Compliance,” industry leaders emphasized that the era of securing funding based solely on pitching ideas is over.
Dipo Alabede, CEO of the mobile payment company Clane, highlighted in his presentation that investors now demand clear prospects of profitability before committing funds to any startup. “Between 2020 and 2023, many investors were willing to fund mere ideas. Today, you must have a market-ready product generating substantial revenue, ideally reaching profitability,” he explained.
Alabede further recommended that fintech companies diversify their funding sources. Beyond traditional venture capital and private equity, they should consider debt financing and strategic partnerships.
“While continuing to pursue traditional venture capital and private equity, focus on attracting investors with experience in emerging markets and fintech,” he advised. “Additionally, explore debt financing options such as convertible notes and venture debt to supplement equity funding without diluting ownership. Partner with strategic investors who can offer not only capital but also valuable strategic guidance, industry connections, and operational support.”
Credit: Nairametrics
