The Securities and Exchange Commission (SEC) has approved the rules for listing on Nigeria Exchange Limited (NGXnew )’s Technology Board, which could herald a new era for Nigerian startups.
The technology board is a specialized platform for technology-based companies to list on The Exchange and raise capital. NGX’s board of directors aims to encourage investments in indigenous technologically inclined companies and others across Africa, increase visibility for these companies, and ultimately deepen the Nigerian capital market. Securities trading on the NGX Technology Board will be available to qualified institutional investors, retail investors, and high-net-worth individuals.
The approval comes as the Nigerian Exchange positions itself to take a bite out of Nigeria’s growing startup market, which has produced five unicorns (companies at an early stage of business but each with a valuation of $1 billion or more) and established Nigeria as Africa’s tech capital.
From Jumia, OPay, Interswitch, and Flutterwave to Andela, the newest of the five, the country’s tech firms are closely examining digital gaps in the way businesses serve consumers. They’re doing it with turnkey solutions that have the kind of promise and charm that investors from Sweden and the US cities of Silicon Valley and San Francisco can’t resist.
However, NGX’s vision extends beyond Nigeria, where startups received one out of every three dollars in fintech funding allocated to Africa, the Middle East, and Pakistan last year.
The push will pave the way for startups with a few years in business who want to raise money to expand their operations.
The NGX hopes to be a continental major player at this level of capital-raising intervention, as Africa’s fintech revenue warms up to jump by 800% to $30.3 billion by 2025, according to a McKinsey & Co study released in August.
“This is a landmark achievement that will position the Exchange as an attractive destination for capital formation by companies within the Technology Sector,” said the CEO of NGX, Temi Popoola. “We are confident that NGX Technology Board will encourage start-ups, both Nigerian-founded and from other African countries, to list on the Exchange as they work towards meeting their financing needs.”
The NGX had been trying to persuade the SEC to agree to the listing rules since at least February, and it finally succeeded on December 15th.
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