Why Nigerian startups aren’t itemizing on the NGX, in line with TLP

Three years after the Nigerian Change (NGX) created a devoted Know-how Board to draw high-growth tech corporations, not a single startup has listed on it. A brand new report from enterprise regulation follow TLP Advisory argues the absence is the results of a number of, mutually reinforcing lapses throughout founders, traders, the change, and market construction.

Nigeria’s tech ecosystem is likely one of the nation’s strongest financial engines. ICT contributed 19.78% to GDP by late 2024, in line with the Nationwide Bureau of Statistics, powered by over 3,000 startups, greater than $1.18 billion in enterprise capital funding in 2024, and unicorns like Moniepoint and Flutterwave. But none of those corporations have pursued a home IPO. In 2024, YC-backed web service supplier, Tizeti, introduced plans to listing on the NGX. TLP’s report suggests this hole is rooted not in lack of ambition however in misaligned incentives, poor consciousness, and market limitations.

“All of the gamers within the Nigerian tech ecosystem have a share of the accountability right here, from founders who primarily increase in USD and have due to this fact added one other layer of complexity to itemizing in NGN, to traders who contemplate secondary sale and M&As as their solely path to exit, to skilled advisers who usually overlook the NGX. However a lot of the buck stops with NGX when it comes to consciousness,” Funkola Odeleye, Co-founder of TLP Advisory, mentioned.

The report surveyed 36 founders to assemble quantitative knowledge on their pursuits, consciousness, and issues concerning a possible NGX itemizing, supplemented by qualitative interviews with key stakeholders throughout the ecosystem, together with enterprise capitalists and capital market specialists.

Founders are cautious and confused

The report famous that founders are, in some ways, the primary and most important hyperlink within the damaged chain. It reveals that 53% of founders who haven’t thought of an NGX itemizing merely don’t perceive how native listings work or why they need to pursue them. It discovered that”The NGX must do some consciousness, “ Adewale Yusuf, co-founder of AltSchool Africa, mentioned within the report. “We don’t perceive a whole lot of issues that occur on the NGX.” 

The report means that founders usually are not actively searching for this details about the NGX due to the foreign money mismatch that presents itself from their very first funding spherical. The report exhibits that 76.5% of funded startups increase their capital in US {dollars}, although their revenues are largely earned in Naira. Nonetheless, international traders who make investments {dollars} demand returns in {dollars} to keep away from Nigeria’s foreign money devaluation danger. This creates what the TLP report calls a “elementary financial stress” that makes a Naira-denominated exit on the NGX a foreign money mismatch, and renders dollar-based exits structurally extra enticing to founders. 

This mix of structural mismatches, information gaps, and high-cost boundaries creates a rational incentive for founders to look elsewhere. “Founders, and their traders to some extent, who know that IPOs are a risk, haven’t averted their minds to the NGX, and solely consider AIM or NASDAQ when these itemizing conversations come up,” Odeleye mentioned.

Traders and advisers are M&A centered

The report additionally discovered that startup traders {and professional} advisers are key enablers of this drift to the desire of international listings. Though its survey exhibits a transparent desire for a commerce sale, with 45.8% of founders preferring an acquisition and solely 20.8% named an IPO as their most well-liked exit, traders and advisers are proven to have tunnel imaginative and prescient for exits in the identical method, in a manner that nearly utterly excludes the NGX. To this point, Africa has seen over 60 acquisitions in 2025 alone, a 59% year-on-year leap, in line with TC Insights knowledge.

This desire is an energetic a part of their funding technique. Dolapo Morgan of Ventures Platform confirmed that VCs by no means think about an IPO regionally, viewing it as a extremely unbelievable one-in-a-hundred alternative. Traders additionally bear direct accountability for the difficulty of foreign money mismatch in native listings as they’re those deploying the USD to take a position and, rationally, anticipating USD returns.

The NGX is distant and shallow

Whereas founders and traders share accountability for the absence of native listings on NGX, Odeleye insists the buck stops with NGX for failing to construct a bridge to the tech ecosystem. The change is repeatedly described as distant, and the report’s knowledge on lack of know-how gives proof of this distance. That means that regardless of the NGX releasing its Know-how Board itemizing guidelines in 2022, the sensible steps haven’t reached the founders themselves.

The report additionally argues that the NGX could also be perceived as distant, and why founders are rational to disregard it as a result of the native market is just too small. Based on the report, the overall market capitalisation of the NGX is $62 billion, virtually 0.2% of the New York Inventory Change’s (NYSE) $32 trillion market cap, pointing to a structural liquidity and scale downside.

The report calculates that simply two $2 billion tech IPOs, an affordable measurement for a unicorn, would represent practically 6% of the complete change’s worth. Traders describe this focus as unhealthy as a result of it creates excessive volatility, making the complete market’s efficiency skewed by the fortunes of only one or two startups. It additionally signifies that the market can’t take up a pipeline of such corporations, which makes it a poor match for a thriving ecosystem with a number of unicorns. 

This lack of depth can create illiquidity, the place an investor can’t promote a big block of shares with out crashing the inventory’s worth, successfully wiping out their very own good points, which is a major concern for 16% of founders. The creation of this shallow market might additionally gas the concern of the 26% of founders with valuation issues. They fear {that a} market with no deep base of tech-savvy traders, who depend on conventional price-to-earnings (P/E) ratios and dividend yield, will fail to grasp their progress fashions. The report calculates {that a} $100 million private-round firm may very well be valued at simply $60 million on the NGX, successfully punishing them for itemizing regionally.

An aligned ecosystem

The findings present that there isn’t any single repair; as an alternative, the answer requires a coordinated technique to align founders, traders, regulators, and the change to construct a structurally viable market. 

The report outlines a transparent roadmap to make native IPOs an attainable and enticing possibility on the NGX, beginning with higher training and consciousness. “The NGX has to parley with the tech ecosystem and never be distant; suppose roadshows, internet hosting data periods, doing an ecosystem tour, inviting founders to the Change,” Odeleye added. 

This engagement must be paired with regulatory and itemizing framework reforms, together with simplifying necessities and documentation, and probably making a centralised digital portal to cut back the complexity of coping with regulators. To handle liquidity, the report requires market-making incentives and broader participation from retail and institutional traders, and proposes exploring twin itemizing partnerships with international exchanges to cut back greenback dependence for corporations which have already raised funds in {dollars}. 

Fixing the Nigerian tech IPO hole would require ecosystem-wide coordination. Solely by aligning consciousness, regulation, capital, and market infrastructure can Nigeria’s capital markets assist the dimensions and class of its fastest-growing startups. Regardless of market challenges, there may be optimism: 42% of the founders surveyed mentioned they might significantly contemplate itemizing on the NGX if situations improved.