Nigeria startup ties to the US spark fresh debate

A new report has revealed that 74 per cent of Nigerian technology companies maintain links with the United States, raising fresh questions about the direction of the country's growing technology industry and where its economic value is created.

The report, titled Home & Away: Tracking African Tech’s Global Footprints, was produced by TLP Advisory and examined 100 technology companies across Nigeria, Kenya, South Africa, Egypt, Ghana and Morocco. According to Punch, many Nigerian startups maintain US connections mainly for corporate registration and access to international funding.

The findings show that Nigerian tech startups raised approximately $572m in venture capital funding in 2025, representing about 14 per cent of Africa's total venture funding. However, the report suggests that raising money internationally has become increasingly important as businesses deal with currency depreciation, limited opportunities for local investor exits and the requirements of foreign investors.

One important finding is that 81 per cent of US affiliations are used exclusively for holding company structures. This suggests that many founders are not necessarily moving their entire businesses abroad. Instead, they establish foreign corporate entities to make fundraising and ownership arrangements easier while keeping their main operations in Nigeria.

##Why Nigerian Startups Maintain US Connections

Several factors explain this growing relationship. International investors often prefer familiar legal systems and corporate structures when investing in technology companies. Registering a holding company in the United States can therefore make it easier for Nigerian founders to attract venture capital and build relationships with global investors.

Currency instability is another major consideration. The report notes that 76.5 per cent of funded Nigerian startups raise capital in US dollars while generating revenue in naira. This creates financial pressure because companies must manage expenses and obligations in foreign currency while earning much of their income locally.

The United States is not the only destination for these businesses. The report also identifies the United Kingdom and the United Arab Emirates as important markets. While US connections are largely associated with financing and holding structures, the UK and UAE offer opportunities for operational expansion, licensing and access to other markets.

##What the Findings Mean for Local Growth and Jobs

The growing number of Nigerian startups with foreign corporate connections presents both opportunities and challenges for the local economy.

On the positive side, international funding can help founders develop products, employ skilled workers, improve technology and expand their services. Nigerian engineers, developers, designers and other professionals can continue contributing to businesses even when their parent companies are registered abroad.

However, there are concerns about how much long-term economic value Nigeria retains. When ownership and fundraising structures move overseas, some corporate decisions and future investment returns may also become tied to foreign jurisdictions.

For the Nigeria tech ecosystem, the bigger challenge is creating an environment where businesses can raise capital, grow and remain competitive without feeling compelled to establish foreign structures simply to attract investors.

Improving access to local investment, strengthening the domestic capital market and supporting technology entrepreneurs could help address this challenge. It could also encourage more startups to expand their operations and create sustainable employment within the country.

Ultimately, the report does not suggest that Nigerian founders should avoid international partnerships. Rather, it highlights the importance of building strong local businesses while taking advantage of global opportunities.

The discussion around Nigerian startups US ties should therefore go beyond where companies are registered. What matters most is whether their growth creates meaningful jobs, supports local innovation and contributes to Nigeria's long-term economic development.