According to a BusinessDay report, Nigerian tech startups raised $191 million in equity funding between January and October 2025. This was a steep drop from the $300 million recorded in the same period in 2024. The decline represents a 57 percent year-on-year fall.
It was against this backdrop that Andersen’s collaborating law firm, The New Practice (TNP), tried to redirect the conversation for startup founders. The firm highlighted the opportunities in the debt market during a roundtable held at its Lagos headquarters. The session was themed “Scaling Smarter: Debt Markets as a Growth Catalyst for Startups.”
The event was moderated by TNP partner, Bukola Bankole. It featured a strong lineup of speakers. They included Temi Popoola, Group CEO of NGX Group; Timchang Gwatau, Sector Head for Non-Bank Financial Institutions at GCR; Seyi Ebenezer, CEO of Payaza Africa; and Adeadyo Aderoju, Lead for Structured Products at Norrenberger.
Commercial papers became one of the focal points of the discussion. Speakers noted that the entry barrier has dropped significantly in recent years. What was once a tool used almost exclusively by Nigeria’s largest corporates is now accessible to smaller companies.
Over N1 trillion worth of commercial papers have been issued in 2025. This shows how central the instrument has become to short-term financing for Nigerian corporates. Popoola credited much of this shift to the Securities and Exchange Commission (SEC).
“Today, we have a regulator who supports the market more than I do as a market operator. That’s a material statement,” Popoola said.
Still, easier access does not remove the need for caution. “This is the capital market. It’s serious business,” Aderoju, who leads Norrenberger’s Structured Products team, warned.
Before accessing the debt market, either via a bond issuance or a commercial paper programme, it is customary to get a credit rating. During the roundtable, Timchang Gwatau, from GCR Ratings Nigeria, was available to guide through the process.
According to Timchang, the rating process rests on four major pillars. The first is your operating environment, in this case, Nigeria, where factors like wealth levels and purchasing power shape the baseline risk of any entity. The next is the sector you play in. Sectors are not equal, he noted. Agribusiness and telecoms currently rank among Nigeria’s most credit-resilient industries. This is an exogenous factor; founders don’t control it, but it shapes their rating outlook.
The third pillar is the business profile, where corporate governance becomes critical. Rating analysts examine who audits you, how your board is structured, whether your board is truly independent, and the quality of your board packs and meeting minutes. They look for strategy, consistency, and evidence that the business is being run properly. Weaknesses here can create severe negative impacts, even if the financials look good.
The fourth area is the financial profile, which extends beyond past performance to what the entity is likely to do in the future. Early-stage companies can offset financial gaps with strengths in governance or structure.
Finally, he noted that relationships with financiers matter. Stable, long-term banking relationships signal continuity. Sudden changes in lenders raise questions. Consistency helps strengthen the overall qualitative assessment.
The roundtable also featured a compelling account from Seyi Ebenezer, CEO of Payaza, who narrated how the company was built by deliberately tapping the debt market.
“When we were starting Payaza, we had a lot of people come to us,” he said. “We had VCs and PEs throwing money at us. However, we looked at the prospects and said to ourselves that this thing can work on a debt level.”
Payaza, a payment solutions provider, has so far raised about N40.37 billion across Series 1, 2, 3 and 4 of its N50 billion commercial paper programme. Moderator Bukola Bankole described the company as a “powerful example of what discipline and the smart use of debt can look like in growing a business.”
Ebenezer used the moment to emphasise his philosophy about leadership and growth. Successful business management, he said, is rooted more in discipline than in raw intelligence. “Disciplined people supervise smart people,” he noted, arguing that founders do not need exceptional academic credentials to build strong companies. What they need is discipline, the kind that shapes decisions and keeps a business steady.
He tied this principle directly to the nature of debt. Debt, he said, enforces structure. “When people are in debt, they become disciplined,” he explained. Interest runs every day, including weekends, creating a constant pressure that forces business owners to stay alert and responsible. “You have no reason not to pay,” he added.
This obligation, he argued, builds a rhythm of accountability: payments must be made, timelines must be respected, and financial planning becomes unavoidable. For that reason, Ebenezer concluded that entrepreneurs seeking sustainable growth may find that operating under a disciplined, debt-driven framework offers the structure their businesses need.