Scaling Through Crisis: Impact Assessment on Startups and Scaleups in Nigeria
by Eloho Omame (Managing Director & CEO, Endeavor Nigeria)
This week, along with Briter Bridges, Endeavor Nigeria released a report titled “Scaling Through Crisis: Impact Assessment on Startups and Scaleups in Nigeria”. The report is a qualitative assessment of the impact of the pandemic on Nigeria’s innovation ecosystem. It examines the rising trends from the “new normal” — which we are all in the process of adapting to — and assesses what strategies are being implemented by various stakeholders.
The pandemic took the world by surprise, and the subsequent financial downturn in the global economy was severe, causing a number of businesses to struggle for survival. It is clearly important to track and study the effects of these phenomena on businesses and governments. In-depth conversations were held with founders, business leaders, investors, institutional lenders and policymakers and agencies in Nigeria.
The impact of the crisis ranges from massive sales and revenue declines to lost jobs, as startups and scaleups needed to cut back on their expenses. This, unfortunately, creates a vicious cycle where a fall in consumer demand leads to decreased revenues for companies and decreased tax revenues for the government — which in turn can affect their intervention plans for businesses.
Adapting to change has become more important than ever, as smart solutions are necessary to survive in a constantly evolving world.
The report also explores how businesses and investors, as part of their immediate responses to the crisis, tactically redirected resources to business areas that were less likely to suffer from shocks. Adapting to change has become more important than ever, as smart solutions are necessary to survive in a constantly evolving world. Some industries such as hospitality, real estate and mobility suffered greatly while e-commerce, e-learning, energy and utility, telemedicine, medical distribution and digital financial services players experienced a boom in demand. In order to stay afloat and survive, companies were forced to take several measures such as working remotely, reducing growth plans to protect their runway, pivoting to offer new products/services, and cutting costs, which unfortunately led to job losses.
At Endeavor, we can’t stress enough the value that a supportive environment creates for high-impact entrepreneurs, who drive massive job creation, innovation and help sustain the overall health of the economy. This report paints a vivid picture of the challenges experienced by scaleups during this unique time we all find ourselves in.
Read the full report here.