Between 2019 and 2021, five Nigerian companies have raised
funding led by foreign venture capital firms making them unicorns – companies
valued above $1bn.
Interswitch raised $200m from Visa in 2019, placing the
company’s value above $1bn.
Jumia Technologies listed on the New York Stock Exchange
ignoring the local bourse on April 2019. It was valued at $1.67bn as of the
close of trading on September 30.
Also, Flutterwave raised $170m in 2020 bringing its
valuation to $1bn while Opay and Andela have secured $400m and $200m
respectively to be valued $2.0bn and $1.5bn in 2021. The NGX inaugurated the
Technovation conference to engage the blooming tech sector and its major
players.
Responding to questions asked during a panel discussion at
the virtual conference, divisional head of listings at NGX, Olumide Bolumole,
stated that to enhance capital formation for tech firms and encourage them to
list on the exchange, they were looking to tweak some rules that could form
potential hindrances to the companies.
He said many of the listing rules required companies to be
profitable for listing, but since tech firms were largely in their early
stages, a requirement for profitability would be a major hindrance to them.
“That is something we are critically looking at and seeing
if we can find another way of achieving that same metric or even doing away
with it completely if the buy side does not care for that.
“The other area that we have seen is on corporate governance
rules which may require some modifications.
“We are very intentional with having conversations about
seeing how we can tweak things for tech companies.
“Financial reporting is another one. We have quarterly
financial reports that International Financial Reporting Standards state, and
there are many good reasons it exists that way.
“Maybe, there is an alternative way that we could deal with
that within the contexts of the legal requirements of Nigeria and where there
are specific opportunities for modifications.”
Bolumole revealed that the exchange intended to give its
input in the startup bill and also help the high net worth institutional and
retail buy side in the valuation of tech companies.
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