Lagos state govt injects ₦1 billion for startup funding and innovation research

₦1 billion in funding marks an astronomical increase in allocation to the initiative based on previous precedents.

Lagos state govt injects ₦1 billion for startup funding and innovation research
Credit: LASRIC

Lagos state government has approved the allocation of ₦1 billion ($680,000) to provide seed funding for startups, research on innovation and STEM programmes for school children. The funding was announced at the inauguration of the new Lagos State Science, Research and Innovation Council (LASRIC) on Friday, June 15, 2024.

This investment in innovation is a strategic move to diversify the economy, solve local problems, and position Lagos as a leader in Africa's technological revolution.

The ₦1 billion is to be administered by a 13-member LASRIC council led by Prof. Olumuyiwa Odusanya, Vice Chancellor of Lagos State University of Science & Technology. Notable members include Tomi Davies, President of the African Business Angels Network (ABAN); Nkemdilin Begho, CEO of Future Soft Technologies; Feyisayo Alayande, Executive Secretary of Lagos State Employment Trust Fund; Victor Afolabi Founder, Eko Innovation Centre; Sulaimon Abubakar, CEO Sterling Bank.

Credit: LASRIC | Deputy Governor of Lagos state Femi Hamzat speaking at the event

Building on the groundwork laid by the inaugural council established in 2019, the newly formed council takes the torch, aiming to position Lagos State as a global knowledge hub through the strategic application of science and technology.

“Private and public sector collaborations are crucial at a time like this of global economic challenges. I look forward to working on the council and helping Lagos state identify viable startups,” Victor Afolabi, CEO of Eko Innovation Centre, a new member of LASRIC said.

₦1 billion in funding marks an astronomical increase in allocation to the initiative based on previous precedents. At the event, Lagos Commissioner for Innovation, Science and Technology, Tobosun Alake, shared that the council started with ₦170 million in funding in 2019, and three years later it rose to ₦339,000 million.

He further explained that the funding is provided in tranches, meaning it's released in instalments until it's depleted. This approach is necessary because securing long-term funding through a statutory ordinance is still under consideration.

“We want to fund LASRIC yearly but that has to be by law. As of today, the law isn’t in place, so we fund it on a case-by-case basis. We’re working hard to make it statutory,” Alake told at the event.

With ₦1 billion allocated, the council will decide how to distribute the funds between programmes. Alake explained that startups that receive funding are evaluated using the POEM (Proposition, Organisation, Economics, and Milestones) Framework. This framework assesses the problems addressed by the businesses, their value proposition, their organisational structure, the feasibility of the business model and their progress towards achieving milestones.

Out of the over 20 startup beneficiaries of LASRIC, its impact is most evident in the success of Pricepally, a digital food cooperative platform. In 2020 when LASRIC provided Pricepally a ₦5 million grant, the year-old startup was serving just 26 customers in Lagos according to Alake. Since then, the startup has flourished, raising $1.3 million in additional funding. Today, Pricepally serves over 2,000 customers daily across Nigeria and employs a staff of about 100 people. LASRIC has also supported other promising startups like Terwork, CCHub, StemCafe, Earlybrite, Adire Lounge and Shitfa Technologies.

The council will be looking to support more startups that can develop and drive innovation across all sectors in Lagos.

"Our vision at LASRIC extends beyond simply funding companies," Alake said. "We aim to be a catalyst, fostering innovation in areas that will generate significant value. Take Tesla, for example, they were on the brink of collapse, yet a US government investment of over $400 million helped them become one of the biggest companies today, with millions of cars produced and thousands employed."

Applications for LASRIC funding are opened periodically through their website. To be considered, startups must first pass an initial screening process to ensure they meet eligibility criteria. Qualified applicants then proceed to a panel review by industry experts who assess the viability and potential impact of the business. It's important to note that previous grant recipients are not eligible to re-apply.

Beyond startup funding, LASRIC also award grants to researchers and invests in STEM education programs. Alake emphasised the importance of early exposure to problem-solving.

"We fund companies developing improved STEM curriculums for schools. Our goal is to encourage young minds to think critically and solve problems from a young age, similar to developed countries where students are actively creating solutions by secondary school."

LASRIC draws inspiration from similar initiatives across Africa, like the Rwanda Innovation Fund (established in 2009) and the Senegal Teranga Startup Initiative (launched in 2018). These programs share a common goal: supporting Africa's promising young entrepreneurs and early-stage ventures that often face challenges securing funding.

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