Despite global distress, over 80 Nigerian web3 startups have raised $130m – report

Nigeria has solidified its position as Africa’s leading hub for Web3 innovation, with over 80 startups collectively raising $130 million and contributing 4% of the world’s new Web3 developers so far.

This is according to the inaugural “Nigeria Web3 Landscape” report released by Hashed Emergent, a venture capital firm focused on accelerating Web3 adoption in emerging markets in partnership with Quidax, Convexity, Web3bridge, and Infusion Lawyers.

It paints a vibrant picture of Nigeria’s burgeoning Web3 ecosystem, driven by a fast-growing developer base, grassroots innovation, and increasing blockchain integration in the financial and public sectors.

According to it, the $20 million raised was primarily in early-stage deals, concentrated in infrastructure and financial applications. Infrastructure startups led the charge, attracting $11 million, while finance-focused startups raised $7 million.

It attributes the funding growth to the adoption of stablecoin-powered payment solutions.

Stablecoins, such as USDT, have become a cornerstone of Nigeria’s Web3 economy, with the USDT/NGN trading pair now the most traded on centralised exchanges. Stablecoin transfers in Nigeria reached nearly $3 billion in the first quarter of 2024, reflecting their role in cross-border payments and as a hedge against inflation.

“Stablecoins are not just a financial tool; they’re a practical solution for Nigerians navigating economic challenges,” the report notes.

While infrastructure and finance sectors flourished, funding for entertainment and gaming startups dipped to $2 million in 2024 from $17 million in the previous year. Despite this, builder interest in SocialFi and Gaming/NFT projects remains robust, suggesting potential for future growth as capital flows stabilise.

Nigeria is now a developer powerhouse

Nigeria’s developer is a key driver of its ecosystem momentum. The country saw a 28% year-on-year increase in developers, reaching 1.1 million in 2024. Also, 4% of global new Web3 developers hail from Nigeria, the highest contribution from any African nation.

Notably, 86% of these developers are under 27, and over half entered the Web3 space within the past year, often through community-led initiatives like Web3bridge, SuperteamNG, Web3Ladies, and bootcamps hosted by ecosystems such as Solana, Base, and Starknet.

Employment in Nigeria’s Web3 sector remains fluid, with only 15% of developers in full-time roles and 41% working as freelancers.

Compensation reflects the sector’s crypto-native ethos; 45% of developers are paid in stablecoins, while 31% receive payments in ETH, BTC, or SOL. Although compensation gaps persist compared to global peers, Nigerian developers are increasingly accessing international roles, bounty programmes, and entrepreneurial opportunities.

“Nigeria’s developer talent is its competitive advantage,” said Tak Lee, CEO and Managing Partner at Hashed Emergent. “The country’s young, tech-savvy workforce is not only building for Nigeria but also contributing to the global Web3 economy.”

Onchain adoption beyond trading

Nigeria’s Web3 adoption extends far beyond retail crypto trading.

According to Chainalysis, the country ranked second globally for crypto adoption in 2024, receiving $59 billion in crypto value, including $24 billion in stablecoins. Stablecoin trading has surpassed Bitcoin on centralised exchanges, underscoring a shift toward practical use cases like payments and savings.

Public sector adoption is also gaining traction. National agencies and state governments are implementing blockchain solutions for identity verification, land registries, education records, and healthcare systems.

These operational systems aim to enhance transparency and efficiency in public services. For instance, blockchain-based point-of-sale infrastructure now tracks transaction data for over 50 million users, integrating Web3 into everyday systems.

However, challenges remain. Legacy public infrastructure often lacks the technical readiness for seamless blockchain integration, and institutional capacity gaps, such as limited digital skills, hinder progress.

The report emphasises the need to address these bottlenecks to sustain long-term impact.

Meanwhile, Nigeria’s regulatory landscape is evolving but remains complex. In 2021, the Central Bank of Nigeria (CBN) restricted banks from handling crypto transactions, a policy reversed in December 2023 to allow banks to serve licensed Virtual Assets Service Providers (VASPS).

The Securities and Exchange Commission (SEC) now regulates digital assets and has introduced the Accelerated Regulatory Incubation Program (ARIP) to streamline VASP licensing.

Despite these advances, contradictions persist. In 2024, the Nigerian Communications Commission (NCC) blocked major exchanges like Binance and Coinbase, even as the SEC approved local platforms like Quidax.

The report identifies key regulatory challenges, including the lack of unified digital asset legislation, overlapping mandates among agencies like the SEC, CBN, and NDIC, and unclear frameworks for decentralised finance (DeFi), non-fungible tokens (NFTs), and decentralised autonomous organisations (DAOs).

Industry groups such as SiBAN, VASPA, and FintechNGR are actively engaging with regulators, and the Investments and Securities Act 2024 signals progress toward a cohesive framework.

“Regulatory clarity is critical for Nigeria to fully capitalise on its Web3 potential,” the report states.

Ultimately, the “Nigeria Web3 Landscape” report concludes that Nigeria’s Web3 ecosystem is on a strong growth trajectory, but its success depends on alignment between regulators, global protocols, and local talent.

Hashed Emergent remains bullish on Nigeria, viewing it as a critical hub for Web3 innovation in Africa. The firm’s investment strategy focuses on early-stage founders, offering capital, strategic support, and access to a global network of investors and developers.

“Nigeria’s momentum in Web3 adoption will not only shape the future of digital innovation locally but also serve as a catalyst, leapfrogging Africa to the forefront of the global Web3 economy,” Lee said.