Before the AI hardware startup Humane launched in San Francisco, a Nigerian hardware product with the same name already existed. While one was backed by $230 million and the other by no funding, both ultimately failed.
The Nigerian Humane barely made it past the concept stage. According to a 2017 article by Techpoint Africa, Humane featured in the regional semi-final of the Microsoft Imagine Cup, hosted at the Wennovation Hub in Ibadan, Oyo State. The device was designed to make smartphone usage easier for visually impaired individuals and was so promising that it won the regional and national competitions.
However, Humane remained little more than a student project built to win a prize. A year later, team member Obasegun Ayodele told Techpoint Africa that developing a viable prototype would be prohibitively expensive.
It is tempting to imagine that with the right funding, Humane might have evolved into a full-fledged company producing life-changing assistive tech. But even with substantial capital, success is not guaranteed. Its American namesake — which developed the AI Pin and raised $230 million — still failed, despite access to talent and technology.
Hardware is notoriously difficult to build anywhere in the world, and in Nigeria and Africa, it is even tougher. From limited funding to a lack of specialised talent, most hardware startups struggle to survive. Yet, there are signs that the tide may be turning.
Nigerian hardware startups are finally making money
There are still only a handful of hardware startups in Nigeria. Unlike software startups — predominantly fintech — it’s hard to list 20 active hardware companies in the country. Among the few that exist, only two — Terrahaptix and NEV Electric — have publicly shared financial figures.
Earlier this year, NEV Electric revealed it had generated $14 million in revenue over 14 months and projected it would hit $50 million within the next 15 months. The company attributes this growth to a surprisingly rapid adoption of electric vehicles in Africa.
According to CEO Mosope Olaosebikan, there are now around 5,000 EVs on Nigerian roads.
NEV Electric also claims to be Africa’s largest electric bus manufacturer, having deployed 100 buses — surpassing BasiGo’s 52.
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Similarly, Terrahaptix has made notable progress. In 2024, Techpoint Africa learnt that the company had recorded $2 million in orders for its drones and other hardware products and had even expanded by exporting to South Africa.
CEO Nathan Nwanchukwu said the oil and mining industries represent their biggest drone market.
Still, not all hardware ventures share this success. Some years ago, during a conversation about the fate of hardware startups in Nigeria, Monsuru Anifowose, CEO of Kifta Technologies, a defence tech startup, told me that the company’s operations had shifted to the US because Nigeria lacked the infrastructure needed to sustain hardware production.
This raises an important question: How have NEV Electric and Terrahaptix succeeded?
Why Nigerian hardware startups have started succeeding
Eliot Pence, Managing Partner at Tofino Capital, which invested in Terrahaptix, believes the cost of building scalable hardware is falling rapidly. On a call with Techpoint Africa, he explained that technological advancements — especially in automation — have allowed companies to reduce costs by as much as 30% in areas like logistics, procurement, and inventory management.
Manufacturing strategies like Just-in-Time (JIT) production have also helped streamline operations and minimise storage costs.
Another factor driving cost reduction is open-source hardware. This model allows individuals and companies to publicly share design files and instructions for components like circuit boards or sensors.
Rather than building everything from scratch, developers can use existing, community-tested blueprints, saving both time and money.
Platforms such as Arduino and Raspberry Pi have made it easy to create hardware prototypes quickly and affordably, thanks to widely available tools and parts supported by large global communities.
Pence said Terrahaptix fully leveraged these cost-reduction trends, which encouraged Tofino Capital to invest.
However, he stressed that hardware wasn’t the most attractive part of the business — it was the software.
“The most sophisticated thing Terrahaptix does is on the backend — the software that coordinates the physical assets,” Pence said. “They just happen to have a hardware arm.”
Nwanchukwu echoed this sentiment, explaining that including software was a deliberate strategy.
“Investors want to see recurring revenue,” he said. “Hardware with a software edge made Terrahaptix appealing.”
As an example, he revealed that the company had signed a deal to integrate its ArtemisOS software with the surveillance systems at Aba Independent Power Plant (Aba IPP). This will earn the company $60,000 annually in subscription fees while helping the power plant automate its surveillance systems and respond to threats in real time.
Hardware is still hard in Nigeria
Terrahaptix’s success lies in its software-led business model. For NEV Electric, the opportunity comes from Africa’s growing appetite for electric vehicles. Still, these wins don’t signify the emergence of a robust hardware ecosystem in Nigeria — at least not yet.
Funding and talent remain major hurdles. However, these startups show that with the right mix of innovation, business model, and timing, hardware companies can thrive.
Nwanchukwu believes global dynamics may soon favour African hardware manufacturing. He predicts the West will increasingly move away from Chinese-made hardware for political reasons but will struggle to replace it with local production due to high costs. Eventually, there will be a search for a viable alternative.
“The only other region capable of producing affordable hardware at scale is Africa,” he said.
He also predicts that China — like the US before it — will gradually transition from a manufacturing-based economy to a service-driven one.
“Nations go through economic cycles. When you have a large population of low-income youth, they tend to fuel manufacturing. But as they enter the middle class, they prefer white-collar jobs, and the country shifts towards services.”
If that’s the case, another nation will need to step up. Nigeria can position itself to support hardware startups and transform its economy. A ban on solar panel imports gives you an idea of where the current administration’s head is in terms of promoting local manufacturing, but will it work?
