Nigeria and Japan agree $50m innovation fund to back impact-driven startups

Nigeria and Japan have signed an agreement to establish a $50 million innovation fund aimed at supporting startups tackling critical social challenges across the country.

The deal was formalised in Abuja between the Nigeria Sovereign Investment Authority and the Japan International Cooperation Agency.

How the fund is structured

The fund will operate as an onshore public investment vehicle, structured locally and focused on Nigerian founders.

Funding contributions include:

• $14 million in grants from JICA

• Up to $20 million from NSIA

• Additional capital from private sector investors

The fund will target early-stage startups operating in high-impact sectors such as healthcare, education, food security and financial inclusion.

Beyond capital, selected startups will receive technical assistance, product development support, scaling expertise and guidance on market expansion.

A new development model for Japan

According to Japanese Ambassador Suzuki Hideo, the initiative marks Japan’s first use of a blended development model that combines official development assistance (ODA) with private capital.

The approach, described as “co-creation,” emphasises collaboration between local startups and Japanese partners while leveraging private investment to scale solutions. Nigeria is the first country where Japan is deploying this model.

This signals a shift in Japan’s foreign development strategy, moving from traditional aid frameworks to market-driven, partnership-based interventions.

What it means for Nigeria’s startup ecosystem

NSIA’s Managing Director and CEO, Aminu Umar-Sadiq, described the fund as addressing a persistent gap in Nigeria’s ecosystem: early-stage capital for impact-focused startups that are often overlooked by mainstream venture capital.

The fund is currently in the startup identification phase. Investments will begin once qualifying companies aligned with the fund’s social impact and growth criteria are selected.

For Nigerian founders, particularly those building mission-driven businesses, the initiative represents a potentially important source of patient capital combined with operational support.

Strategic significance

At a time when venture funding across Africa has become more selective, the Nigeria–Japan innovation fund introduces a hybrid capital model that blends public backing with private investment discipline.

If successfully executed, the initiative could strengthen early-stage funding pipelines, encourage international collaboration, position Nigeria as a pilot market for new development-finance models, and support scalable solutions to social and economic challenges.

While the ambition is clear, the effectiveness of the fund will ultimately depend on execution, startup selection and the ability to crowd in sustained private investment.