Nearly half of venture-backed Nigerian startups founded within the last ten years make less than ₦10 million ($6,000) in annual revenues, according to a new report by TLP Advisory, a venture capital law firm. The report highlights the struggles of Nigerian startups to scale, with 49% of startups surveyed generating less than ₦10 million a year, while only 15% generate above ₦250 million ($149,000) annually.

The startups attributed their financial struggles to the lack of sufficient capital, limited market reach due to poor marketing, lack of clear regulatory policies, and their revenue models needing revamp. Raising capital is a significant challenge, with 30% of startups stating that it took them at least four years to secure their first funding. Founders cited stress, complex processes, and lack of information and access to investors as reasons why they've been unable to raise capital.

However, there are signs of hope, with nearly one-third of founders raising money to run their startups during their first year. Alternative funding sources, such as angel investors and debt financing, have also played a role in driving growth for Nigerian startups. Despite the challenges, founders remain optimistic, calling for stronger collaboration with policymakers to simplify regulations and support innovation.