Nigerian companies attracted a whopping sum of $8.57 billion in funding between January and September 2019 (9-month). This is contained in the compilation of official press releases and media reports gathered by Nairametrics for the period under review.
In 2019 (9-month), Nigerian corporate space recorded several forms of capital raise which include series funding, rights issues, public offers, corporate bonds, equity and so on.
The Breakdown: Capital raised by sectors
- A cursory review of the data gathered showed that companies in the oil and gas sector attracted the biggest funds, with $3.43 billion in just 9 months. The major oil and gas companies that were recipients of the funds were Oando, Forte Oil and Seplat. Also, the capital raised was in the form of equity.
- The ICT sector ranks second with $1.66 funding received within the period. Funds raised in the ICT sector were in form of series funding, rights issues, loans and equity. Major companies in the ICT sector that were recipients of the funds include Andela, Airtel and MTN Group.
- The manufacturing sector ranks third, with a sum of $1.241 billion funds raised. Major companies that were recipients include Lafarge, Dangote and Nigerian Breweries.
The energy sector attracted $370.45 million within the period under review. Major investors in the sector include Daystar Power, Arnergy, Virtus and Green Energy International Ltd. Funds raised in the sector were majorly series funding and equity.
- The banking sector attracted $325.99 million within the period under review. Major banks that raised capital include Sterling Bank, Eco Bank, and Jaiz Bank Plc.
- Fintech companies rank seventh among the biggest capital raised within the period. The sector raised $202.10 million. Major companies that participated in the fundraises include Sendbox, One Finance, Kudi, Branch, Foundation Capital & Visa and Infracredit.
- Others are logistic and transport ($104.70), E-commerce platforms ($56 million), Entertainment ($50 million), Healthcare ($16.55 million), Agriculture (5.40 million), Hospitality ($3.91 million) and Agrictech ($2 million).
Investors’ sentiments towards the economy remain low
Despite the often challenging funding space, fundraise continues to remain a major tool for remaining competitive, innovative and relevant in corporate Nigeria. Usually, firms make decisions to raise capital through early-stage investors (Venture capital), profit reinvesting, borrowing through banks or bonds, and trading stock.
- However, the slowdown in the economy in 2019 continues to dampen investors’ confidence, as this affects Gross Domestic Product (GDP) growth.
- In the first quarter of 2019, Nigeria’s GDP grew at 2.10%, then it slowed to 1.94% in the second quarter, and inched up 2.28% in Q3 2019.
- As a result, capital importation data, as earlier published, showed that the Nigerian economy received $5.36 billion worth of foreign investments in the third quarter of 2019, compared to $5.82 billion in the second quarter. This is the lowest amount of capital importation received in the year.
- Further analysis of the capital importation shows that ten major sectors of the sixteen sectors, recorded declines in capital importation. The sectors are Shares, Agriculture, Banking, Brewing, Construction, Consultancy, Financing, Fishing, Hotels, and Production.