SEC approves listing of tech startups on Nigerian Exchange

On October 19, 2022, President Muhammudu Buhari signed the Nigerian startup Bill into law. The basic aim of the Startup Act was to promote the growth of the Nigerian startup industry and lower market barriers related to compliance and funding.

Among other requirements, the Nigerian Startup Act provided for the opportunity for startups to raise funding at the capital market through guidelines or avenues created by the Securities and Exchange Commission (SEC). 

On December 19, 2022, the SEC approved and announced new regulations for the listing of tech startups on the Nigerian Exchange Technology Board (NGX tech board). This post details all there is to know about the new tech startup listing on the NGX tech board.

The NGX tech board and SEC

The NGX tech board is a special platform under the Nigerian Exchange for the listing of Nigerian technology companies with the purpose of fundraising in the capital market. With this specialized feature, tech startups and generally tech companies can currently raise funds from the public using the Nigerian Exchange market as a platform to reach intended investors. 

Following this listing of tech companies on the NGX tech board platform, the revenue and overall functioning of tech companies would be improved greatly, with an increased presence of tech companies quoted on the market. 

In addition, local and international investors can better invest in tech startups and other tech companies in the Nigerian space with trust. The listings on the NGX tech board offer an opportunity to varying high net-worth individuals, large corporations, investment companies and other investors to provide funding to tech companies with ease. 

Temi Popoola, the current Managing Director of the Nigerian Exchange expressed hope and optimism in the new rules through the provisions of revenue sources for Nigerian tech companies.

The NGX tech board listing and fundraising rules

The rules provided are filled with varying information concerning the requirements for listing on the NGX tech board platform, fundraising, the requirement for disclosures, criteria for admission into the NGX board platform, duties of startups, capital market operators, investors, advisors, sponsors, issuers, trustees (if any) and others. 

The rules offer a much more balanced form for listing different requirements for startups and big tech companies. When the draft rules were released in November 2022, experts believed that the rules would provide succour to the already succeeding tech industry, which contributes significantly to the nation’s GDP. 

The provisions of the new rules as it relates to the requirements of tech companies are provided below.

Tech Startup criteria for listing on the NGX tech board platform

The Nigerian startup Act defines startups as technology companies that have been in operation for ten years. 

The eligibility for tech startups to the NGX board platform is detailed below.

1. Registration

The Rules require all startup issuers intending to raise funds through the platform to first register their securities with the SEC.

The startup company must also send a written application to be listed to the SEC and must sign the general undertaking provided by the SEC. 

2. The Company must be public

Before application as stated above, tech companies seeking to be listed on the NGX tech board platform must be public limited liability companies.

The intended company can also be a private company which has been re-registered as a public company or a private company floating having a Holding Company that is public and limited by shares or a private company having a Special Purpose Vehicle company.

3. Professional partner

Tech startups must have in their possession, particularly on their board an individual who is an expert in the field of tech the company seeks to leverage and has been an expert for at least a year.

The expert must have a proven track record in the field in which he claims to engage in.

4. Minimum shareholders

The rules provide that startup companies seeking to be listed on the NGX tech board platform must have a minimum of two Shareholders.

The rules further stated that the SEC can prescribe a higher number of Shareholders required in the future. 

5. Operation track record

The tech startup must have been in operation for at least a year before the date of sending the application to the SEC. 

6. Market capitalization

The tech startup must have a market capitalization of 420 million Naira but must not exceed 42 billion Naira as of the date of application.

The rules again provide that the SEC can review the market capitalization requirement from time to time. 

7. Directors and Founders shareholding

The startup must ensure that its founders or directors hold not less than 50% of the share capital of the company for six months from the day of being listed and cannot sell or dispose of such shares during the six months window. 

8. Capital raising

Startups are not to raise more than 5% of their share capital from the NGX tech board listing platform. 

Requirement for Big tech companies registration on the NGX tech board platform

A big tech company according to the Nigerian Startup Act 2022 is a company that has been in operation for over 10 years.

Big tech companies possess similar requirements to startup companies, nonetheless, the difference is stated below.

1. Shareholding: Big tech companies must have at least five shareholders compared to the two shareholders requirement for startups.

2. Capital raising: Big tech companies can raise capital worth 10% of their share capital from the NGX tech board listing platform.

3. Market capitalization: big tech companies must have a market capitalization of over 42 billion Naira as of the date of listing.


With Nigeria being home to the most unicorns in Africa, having five unicorns, the opportunities that abound in the tech sector cannot be overemphasized. It is believed that the new rules would provide further options for tech companies to fund their operations while breaking boundaries in the technovation space.

This article provided an update on the various provisions of the new NGX tech board rules and how it affects tech companies in general. 

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Richard Okoroafor

Richard Okoroafor

Richard is a brilliant legal content writer who doubles as a finance lawyer. He brings his wealth of legal knowledge in corporate commercial transactions to bear, offering the best value that exceeds expectations.

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