Experts have voiced concern about Nigeria’s IT sector, particularly in the areas of insurtech and health-tech.
They talked at the Association of Issuing Houses of Nigeria’s Award Night in Lagos during a panel discussion titled, “The Future of Money: Prospect for Equity Capital Raise in Nigeria.”
Chidi Iwuchukwu, Head of Investment Banking for Africa Regions at RMB and Publicity Secretary of the Association of Issuing Houses of Nigeria, presided over and moderated the conversation.
Some of the actions made by the industry to compete with other sectors were questioned by the experts.
The discussion also focused on what new thinking was needed to raise capabilities and better position the issuing houses to compete in the equity space. The discourse sought to explore trends in the equity capital raise ecosystem and the actions issuing houses could take to rebuild the equity capital markets.
Adeniyi Falade, Director of the Company’s Board of Custodian Investment, questioned why the insurtech industry grew so slowly compared to other sectors.
“In recent months, we have seen insurance technology companies emerge in the Nigerian insurance ecosystem. Particularly noteworthy are the likes of Cassava and Reliance HMO, who in H1 2022 raised $4m and $40m, respectively from venture capital and private equity firms. To what extent do you see these insurtech companies disrupt the business of traditional insurance companies, and what steps are being taken by traditional insurance companies to favourably position themselves against this potential competitive threat from the Insurtechs?” he asked.
According to Falade, research reveals that the most significant pre-seed fundraising by insurtech companies stood at $4m in Africa as of 2021, considered to be lower than other sectors like the African health-tech startups, which raised almost $400m and African fintech, which also raised over $2bn in 2021.
“What could be attributed to this seeming low development of the insurtech industry, particularly when compared to its counterparts in other sectors?” he queried.
Danladi Verheijen, the managing director of Verod Capital, was one of the panellists who brought up additional essential issues.
He claims that Y Combinator just issued a statement warning of an imminent slowdown in VC and PE funding owing to the global economic slump. As a result, startup founders should develop proper strategies to survive this downturn.
He added that despite its dire economic situation, Nigeria had traditionally experienced increased investor interest in ICT firms.
Haruna Jalo-Waziri, Managing Director/Chief Executive Officer of Central Securities Clearing Systems Plc, questioned Nigeria’s preparedness for the revolution, especially using technology and innovation, in light of the rise in the acceptance of digital currency as legal tender for the exchange of goods and services.
“What steps are being taken by the exchanges in Nigeria to strategically position themselves for these technological disruptions?” he asked.
While noting the increase in the population of Nigeria, the Founder of Flying Doctors Healthcare Investment Company, Dr Ola Brown, raised some questions surrounding the health-tech industry.
Brown said, “In light of the population explosion currently experienced in Nigeria, the need for healthcare providers would continue to increase; hence, the emergence of healthtech companies in Nigeria is a welcome development.”
