9am news nigeria report that experts in the financial industry have urged Fintech companies operating in Nigeria, especially, those seeking to raise funds to place greater priority in ensuring profitability in their business strategies before approaching investors for funding.
They also warned that the days when companies could secure funds by merely laying out business ideas to investors are entirely over.
The experts made these remarks at a 2-day TechnNovation FINTECH Conference, organized by FITC with the theme “Building Trust in the Digital Age: Balancing Performance with Compliance.”
Mr. Dipo Alabede who is the CEO of Clane, a mobile payment company, in his presentation at the conference said “Investors are now looking for prospects of profitability before they can commit their funds to any startup”.
The 9am news correspondence Ogasabi mentioned that he added “Between 2020 and 2023, a lot of investors were willing to give you money for an idea, just the idea. But today, you must have a product that is in the market and generating revenue, not just revenue but enough revenue to the level of profitability,”.
Diversify sources of funding
In addition to building a business with prospects for profitability, Alabede advised the Fintechs to ensure that their funding sources were diversified. They urged them to look at a combination of venture capital and private equity, debt financing, and partnerships.
“Continue to seek traditional venture capital and private equity funding, but focus on attracting investors with experience in emerging markets and Fintech” He advised.
Further speaking Mr. Alabede said “Explore debt financing options, including convertible notes and venture debt, to supplement equity funding without diluting ownership and partner with strategic investors who can provide not only capital but also strategic guidance, industry connections, and operational support,”
He also noted the vital role of Fintechs in Nigeria’s economic development and financial inclusion.
Another speaker at the conference Mrs. Adedoyin Odunfa MD/CEO of Digital Jewels Limited said Nigerian Fintechs would also need to balance innovation with compliance, advocating for a customer-centric approach and diverse teams.
She added that “Having committed individuals, robust processes, scalable solutions, and effective collaboration are key success factors that would help the fintechs scale and attract investments”.
Also speaking, the CEO of E-Settlement, Olaoluwa Awojoodu highlighted the transformative and disruptive potential of Artificial Intelligence and the need for Nigerian FinTechs to embrace collaboration instead of competition. He also stressed about the urgency for Nigeria to keep pace with AI development globally.
He called for unified platforms to tackle the spate of fraud, and the need to leverage technologies like Bank Verification Number (BVN), and urged strategic collaboration to surmount challenges and seize opportunities in the evolving digital landscape.
9AM News Nigeria also obtained comments from Chizor Malize, MD/CEO of FITC and convener of the conference. In her address she recognized the transformative role of fintech on the global financial services industry.
Malize said “It is crucial to maintain trust and compliance in the digital age, emphasizing FITC’s role in providing innovative knowledge solutions and capacity-building programs to strengthen the financial services sector”.
Research made by 9AM News Nigeria research team about the key challenges affecting startups in Nigeria revealed that difficulties in security counterpart funding from investors has remained the most daunting challenge among other challenges confronting Fintechs and startups in Nigeria.
