Tizeti, a Nigerian internet service provider, has announced its plans to list on the Nigerian Exchange (NGX), a move that could pave the way for other African startups to follow suit. The company, which has been operating in Nigeria, Togo, and Ivory Coast, has been backed by Y Combinator and has raised $7.4 million in two funding rounds since its launch in 2013.

The decision to list on the NGX is seen as a strategic move to raise capital from a wider pool of investors, particularly in a time when venture capital activity remains sluggish. By listing on the NGX, Tizeti will be able to avoid the pressure of delivering VC-type returns, which can be challenging due to naira devaluation and a slowing economy.

According to Temitope Osunderin, Vice President for Marketing at Tizeti Networks, the company has started the journey towards listing on the NGX, but is currently focused on the launch of its fiber broadband service. While no timeline has been shared for the IPO, the move is expected to be a massive positive for the NGX, which has struggled to convince Nigerian startups to list on its exchange.

African startups often opt to list on foreign exchanges, such as the NYSE, but this move has not always been successful. For instance, e-commerce giant Jumia, which listed on the NYSE in 2019, saw its shares trade at around $14.50 before quickly falling to $4.64, with a market capitalization of $469 million, less than half its almost $2 billion valuation in the past. Similarly, NASDAQ-listed Swvl Holding saw its share price fall from around $247 per share in 2021 to $6.34 in 2024.

Industry players, such as Iyin Aboyeji, believe that startups should consider listing on the NGX after hitting $1 million or more in annual recurring revenue (ARR). Aboyeji argues that startups need to think carefully about why they need to raise a Series A and from whom, as raising a Series A from a fund that can't fund you to a global IPO scale is a "fool's errand."

Tizeti's decision to list on the NGX could mark a shift in the African startup ecosystem, where startups may begin to consider listing on local exchanges as a viable option. The company's success in providing affordable and accessible internet services in West Africa, with a current network that delivers over 180 terabytes of data daily, surpassing a total of 35,219 TB by December 2023, could inspire other startups to follow in its footsteps.

Founded in 2013 by Kendall Ananyi and Ifeanyi Okonkwo, Tizeti has differentiated itself by offering unlimited, uncapped internet at affordable prices. The company's cost-effectiveness is hinged on using undersea cables from providers like MainPne and solar-powered towers. Its products include subscription-based unlimited internet access for homes and businesses in Nigeria and Ghana, co-branded Wi-Fi hotspots with Facebook in high-traffic areas, Voice over IP (VoIP) service, and more recently, FREEFIBER.AFRICA, a new subscription service offering a US IP address, phone number, debit card, and mailing address for $10/month.

As Tizeti prepares to list on the NGX, the move is expected to have a significant impact on the African startup ecosystem, potentially paving the way for other startups to list on local exchanges and raising capital from a wider pool of investors.