How Nigerian startups are de-dollarising their operations

It used to be simple. You built something people wanted, got investments to buy the tools you need and create the team you need to scale exponentially—maybe a few smart hires from abroad. The tech ecosystem was flush with cash and hope for startups and their technology, so the numbers worked.

Until 2023, the numbers stopped working for startups in Nigeria; the naira value has depreciated against the dollar. This eroded growth: revenue, despite growing exponentially in naira, regressed in dollar terms, while expenses have ballooned. To keep their businesses going, founders are changing their strategies and finding ways to make fewer dollar expenses, and. generally, spend less money on their day-to-day operations.

On Friday, April 30, TechCabal, in partnership with CloudPlexo, an AWS service provider, hosted a salon-style discussion well-attended by founders and executives from notable companies, including Piggyvest, Kuda, Sycamore, GetEquity, PaidHR, Moniepoint, and more. We gathered Africa’s brightest minds to share how they are cutting costs in their startups.

Fireside chat with Deji Olowe

The event was headlined by Deji Olowe, founder of Lendsqr, a B2B startup providing infrastructure for digital lenders and board chairman at Stripe-owned Paystack. In an intimate chat with Fu’ad Lawal, Editor-in-Chief of TechCabal, he shared his perspective on major cost centres and efforts to keep expenses reined in. 

He explained switching to open-source tools that allow his team to communicate for free instead of using platforms like Slack that charge as much as $12 per employee. “It is not the software that makes employees accountable to respond to messages,” he quipped.

Acknowledging that employees are the biggest cost centres, Olowe advocated for prioritising local hires at all levels. He noted that hires from Silicon Valley for C-suite roles bring little to no unique expertise that local employees or ecosystem operators lack. He went a step further to assert that he knows no foreign executive whose work has measured up to the pay.

Olowe also encourages training local talent, as banks do, accepting possible churn as a trade-off for lower costs and building ecosystem skills. Olowe, himself a banker for over a decade and previously an executive at banks like Access Bank, urged startups to create local training initiatives within their companies, cutting costs and boosting growth. 

He urged them to collaborate despite competition, like banks, forming consortia to share resources or push initiatives that solve hard problems for everyone in the ecosystem.

Founders related to his measures, some sharing how they have approached reducing costs by checking for costs due to latency, and also employing a mix of on-premises storage and cloud storage. Some noted that they train their employees. 

The engaging 40-minute chat concluded with an open feedback session where founders provided valuable input on TechCabal’s role in the tech ecosystem.

Suggestions included the revival of the “Entering Tech” flagship series, features on startup office environments to showcase internal team dynamics, and more product-focused articles detailing new launches and updates.

The event was complemented by great drinks and just networking. 

Mark your calendars!  Moonshot by TechCabal is back in Lagos on October 15–16! Join Africa’s top founders, creatives & tech leaders for 2 days of keynotes, mixers & future-forward ideas. Early bird tickets now 20% off—don’t snooze! moonshot.techcabal.com.