Nigerian startups face funding gap between seed and growth stages – Sage Grey MD warns

Nigerian startups are facing a significant funding gap between the early seed stage and the growth stage, warns Sage Grey Finance Limited's Managing Director and CEO, Temitope Runsewe. Investors are becoming more selective, demanding evidence of revenue growth and a clear path to profitability, which could create a "missing middle" for startups.

While investors now prioritize product-market fit, revenue growth, and sensible unit economics, they are less focused on immediate profitability. This shift could encourage founders to focus on building viable businesses, generating revenue, and managing costs rather than relying solely on fundraising. Despite the challenges, local venture capital funds, private equity firms, family offices, development finance institutions, and financial institutions can play a crucial role in providing the necessary patient capital for startups to progress from early-stage operations to larger-scale enterprises.

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