Lagos vs Nairobi vs Cairo: which African tech hub fits your startup?

The question keeps coming up in our conversations with founders at LaunchPad: should I build in Lagos, Nairobi, or Cairo? It's not rhetorical. Your choice of hub will shape everything from your hiring costs to your access to capital, from the regulatory environment you navigate to the quality of your peer network. And unlike the early 2010s, when Lagos dominated African tech conversation, the answer today depends entirely on what you're building and who you're trying to reach.

This article cuts through the romanticised talk about African tech ecosystems and gives you the actual trade-offs. We've spent time in all three cities, spoken with founders operating across them, and seen which startups thrive where. By the end, you'll know which hub matches your stage, your product, and your runway.

The three hubs at a glance

Lagos, Nairobi, and Cairo each occupy a different position in African tech. Lagos is the oldest and most crowded ecosystem — it's where Nigerian fintech scaled first, where Yaba became shorthand for African startup culture, and where the money concentrated earliest. Nairobi is leaner, with a stronger open-source and infrastructure focus, and significantly lower operating costs. Cairo is the newest to international attention, with the largest population, the most underpenetrated market, and the fewest foreign founders.

None is objectively "best." What matters is whether the hub's strengths align with your business model.

Lagos: density, capital, and the cost of being central

Lagos remains the largest African tech ecosystem by funding volume. Between 2020 and 2024, Lagos-based startups raised more venture capital than any other African city. That concentration matters: if you're fundraising, your investors are more likely to have an office in Lagos. If you're hiring senior product or engineering talent, the pool is deepest here.

But density has a price. Office rent in Lekki or Yaba ranges from 1.5 million to 4 million naira monthly for a 20-person team space. Salaries for mid-level engineers run 1.5 to 2.5 million naira monthly — roughly 30 percent higher than Nairobi for equivalent experience. Accommodation, food, and transport cost more than anywhere else in the region. If you're pre-revenue and bootstrapped, Lagos will burn your runway faster.

The regulatory environment is also more complex. The Central Bank of Nigeria (CBN) has tightened rules around fintech operations, particularly around money transmission and lending. If you're building financial products, you'll need to navigate CBN guidance on digital financial inclusion, obtain necessary licenses, and work with established payment rails like Paystack, Flutterwave, or Moniepoint. This isn't a barrier — thousands of fintechs operate successfully in Lagos — but it requires capital and legal bandwidth that early-stage teams may not have.

Where Lagos excels: if you're building B2B SaaS for African businesses, an e-commerce platform, or a fintech with serious fundraising ambitions, Lagos gives you proximity to capital and talent. The ecosystem is mature enough that you can find co-founders, advisors, and service providers (lawyers, accountants, designers) who understand startup dynamics. Accelerators like TechStars Lagos, CcHub, and others run regular cohorts.

For deeper analysis of where to physically base yourself within Lagos, see our guide on Yaba vs Lekki: where Lagos founders should base in 2026.

Nairobi: lean operations, East African reach, and a different investor class

Nairobi's appeal is mathematical. Monthly office rent for a similar team runs 400,000 to 800,000 Kenyan shillings (roughly 300,000 to 600,000 naira). Mid-level engineer salaries are 1 to 1.5 million naira equivalent. Power is more reliable. Internet is faster and cheaper. Your runway extends significantly.

Nairobi also sits at the centre of East Africa's largest market. If your product works for Kenyans, scaling to Uganda, Tanzania, or Rwanda is a natural next step. The M-Pesa ecosystem — mobile money that's been operational for 18 years — means payment infrastructure is mature and well-understood. Founders like Wanjiku have built substantial businesses by starting in Kenya and expanding regionally.

The investor base is different. Nairobi attracts impact investors, development finance institutions, and regional VCs focused on East Africa. You're less likely to see the mega-rounds that Lagos startups raise, but you're also less likely to face the pressure to grow at all costs that comes with Silicon Valley-style venture capital. This can be an advantage if you're building something sustainable rather than chasing unicorn status.

The trade-off: Nairobi's fintech scene is smaller and less developed than Lagos's. If you're building financial products that require CBN-equivalent licensing, you'll need to understand Kenya's Central Bank and CMA rules, which are different and sometimes more restrictive. The talent pool for specialised roles (machine learning, blockchain, advanced infrastructure) is smaller. If you need to hire a team of 20 immediately, you'll struggle more than in Lagos.

Nairobi works best for: bootstrapped founders building B2B SaaS, mobile-first consumer apps targeting East Africa, or teams that can operate lean for 18 to 24 months before fundraising. It's also excellent if you're building infrastructure or developer tools — the open-source community is strong, and there's less competition for technical talent than in Lagos.

Cairo: the largest market, the newest ecosystem, and the highest friction

Cairo is different. It's not smaller than Lagos or Nairobi — Egypt's population is 105 million, larger than all of Nigeria's by some measures. The tech startup scene is real but newer to international attention. Funding is smaller. The ecosystem is less visible.

What Cairo offers is market size and underpenetration. If you're building consumer products, the addressable market is enormous. If you're building B2B services for Egyptian businesses, you're entering a market where digital transformation is still early. Costs are lower than Lagos: office space runs 2,000 to 5,000 Egyptian pounds monthly (roughly 400,000 to 1 million naira), and salaries are lower still.

But friction is higher. The regulatory environment is less transparent to foreign founders. Access to foreign currency is restricted — Egypt's Central Bank has strict rules on forex transfers, which affects how startups pay international contractors, buy cloud services, or send money to overseas investors. If you're a foreigner, visa processes are slower. The funding ecosystem is smaller, with fewer VCs actively deploying capital. Payment infrastructure is fragmented — you can't simply integrate Paystack or Flutterwave and reach the entire market.

Cairo works for: founders with deep Egypt expertise, teams building for the Arabic-speaking world, or entrepreneurs willing to navigate regulatory complexity in exchange for a massive addressable market. It's less suitable for first-time founders who need to move quickly or founders without local networks.

Cost comparison: the numbers

Here's a rough monthly operating cost for a 10-person team, excluding salaries:

Note: These are estimates for 2026 and fluctuate with exchange rates and local inflation. Lagos figures are for Lekki; Yaba is cheaper. Nairobi figures assume Westlands or Upper Hill. Cairo figures assume Maadi or New Cairo.

When you add salaries — the largest cost — the picture shifts. A 10-person team in Lagos (5 engineers, 3 ops/sales, 2 exec) might cost 25–35 million naira monthly. The same team in Nairobi might cost 12–18 million naira equivalent. In Cairo, 8–12 million naira equivalent. But Cairo's talent pool for specialised roles is smaller, so you may need to pay for experience or hire fewer people.

Access to capital and funding ecosystems

Lagos dominates by volume. In 2023 and 2024, Lagos-based startups raised the majority of venture capital deployed in Africa. The investor base is deep: Stripe, TechStars, Y Combinator, and dozens of regional VCs have offices or active programmes in Lagos. If you're raising a Series A or B, Lagos is where your investors will want to meet you.

Nairobi has a smaller but active investor base. Regional VCs like Ventures Platform, Chandaria Capital, and others are active. Impact investors and development finance institutions (IFC, Acumen, etc.) deploy capital in East Africa. Funding rounds tend to be smaller — Series A rounds in Nairobi average $500K–$2M, while Lagos averages $1M–$5M. But that also means lower dilution if you're bootstrapped and raising your first institutional capital.

Cairo's funding ecosystem is emerging. There are local VCs and family offices deploying capital, but the volume is lower and the investor base is less international. If you're raising in Cairo, expect to spend more time on investor relations and be prepared for longer sales cycles.

Talent and hiring

Lagos has the deepest talent pool in Africa for tech roles. You can hire experienced product managers, designers, growth marketers, and engineers without extensive recruitment. The trade-off is cost and competition — you'll pay more, and you'll compete with other startups for the same people.

Nairobi's talent pool is strong for engineering and infrastructure roles, particularly open-source and backend work. Frontend and product talent is available but smaller. If you're hiring, you'll find people, but you may need to invest more in training and mentorship than in Lagos.

Cairo's talent pool is large but less accustomed to startup dynamics. You may find excellent engineers and designers, but they're more likely to come from corporate or government backgrounds. This isn't a weakness — many founders have built strong teams this way — but it requires different management approaches.

Regulatory and operational complexity

Lagos operates under Nigerian law. If you're building fintech, you'll navigate CBN regulations, NDPR (Nigeria Data Protection Regulation), and corporate tax rules. The regulatory environment has become more sophisticated — the CBN publishes guidance on digital financial inclusion, and compliance is expected. But the ecosystem is mature enough that there are lawyers, accountants, and compliance specialists who understand startup operations. Working with established payment providers like Paystack or Flutterwave simplifies a lot of this.

Nairobi operates under Kenyan law. The Central Bank of Kenya and CMA have their own rules. Regulatory burden is generally lighter than Lagos for non-fintech businesses. For fintech, regulations exist but are less prescriptive. Compliance specialists are available but fewer than in Lagos.

Cairo operates under Egyptian law, which is less transparent to foreign founders. Forex restrictions are a real constraint. If your business model requires moving money internationally (paying contractors, receiving investor capital), you'll need a local partner or specialist to navigate this. The regulatory environment for tech startups is still evolving, which creates both opportunity and uncertainty.

Which hub for which business model

B2B SaaS targeting African businesses: Lagos or Nairobi. Lagos if you need to raise capital quickly and want investor proximity. Nairobi if you're bootstrapped and want to extend runway. Both have enough business customers to validate product-market fit.

Fintech or payments: Lagos first. The ecosystem is mature, payment rails are established, and regulatory expertise exists. Cairo if your product targets Egypt specifically and you have local expertise.

Consumer apps (mobile-first): Nairobi or Lagos. Nairobi if you're targeting East Africa. Lagos if you're targeting West Africa or want to reach the largest pool of early adopters.

E-commerce or marketplace: Lagos. The merchant and consumer base is largest, and you can reach critical mass faster.

Developer tools or infrastructure: Nairobi. The open-source community is strong, and competition for talent is lower.

Arabic or MENA-focused: Cairo. If your product is built for Arabic speakers or MENA markets, Cairo is the natural hub.

Operating across multiple hubs

Many successful African startups don't choose one hub — they operate across multiple cities. This requires different logistics and creates complexity, but it also lets you access the best of each ecosystem. We've detailed this in our guide on operating across multiple African countries.

The key is being intentional about where your co-founders, key hires, and investor relationships are based. If your CEO is in Lagos and your CTO is in Nairobi, you need systems to keep them aligned. If you're fundraising, you need to decide which hub is your "home" for investor relations.

Founders like Ada and Farida have built multi-hub operations by being clear about who owns what and maintaining tight communication rhythms. It's possible, but it requires discipline.

The decision framework

Here's how to think about the choice:

1. Where is your market? If you're building for West Africa, Lagos is central. East Africa, Nairobi. Egypt or MENA, Cairo.

2. What's your funding status? If you're raising institutional capital, Lagos. If you're bootstrapped, Nairobi or Cairo. If you're pre-seed and need to move fast, Lagos.

3. What's your runway? If you have 12+ months of cash, any hub works. If you have 6–12 months, Nairobi or Cairo to extend it. If you have less than 6 months, Lagos to raise faster.

4. Do you have a co-founder or advisor in any of these cities? Leverage that. Local networks matter more than you'd think.

5. What's your product? Fintech, Lagos. Infrastructure, Nairobi. Consumer, depends on your target market. B2B SaaS, Lagos or Nairobi.

For a deeper dive into Lagos-specific options, see every Nigerian startup hub and accelerator, ranked.

What founders actually do

In our experience at LaunchPad, most first-time founders we work with choose Lagos, even when Nairobi might be cheaper. They do this because they know someone there, because they want to be around other founders, or because they're raising capital. This is rational — the network effects are real.

Second-time founders and bootstrapped teams are more likely to choose Nairobi. They've already proven they can build something; they want to conserve capital and build efficiently.

Cairo remains an outlier. Founders choose it when they have deep Egypt expertise or when they're specifically targeting Egyptian or Arabic markets. It's less of a default choice.

FAQ

Q: Can I start in one hub and move to another later? A: Yes. Many successful startups start in Lagos for access to capital and move to Nairobi or Cairo once they've raised and want to reduce burn. The key is planning the move — don't do it mid-fundraise or mid-product launch.

Q: Which hub has the best internet and power reliability? A: Nairobi has the most reliable power and fastest internet. Lagos is close but more congested. Cairo has more frequent outages. If infrastructure reliability is critical to your product, Nairobi is the safest bet.

Q: Do I need to be physically present in my chosen hub? A: Not always. Many founders run their businesses remotely and visit monthly or quarterly. But for fundraising, hiring, and building networks, physical presence matters, especially in the first 12 months.

Q: Which hub is best for finding co-founders? A: Lagos. The founder community is largest, and there are regular events, accelerators, and communities where founders meet. Nairobi has a smaller but tight-knit community. Cairo's founder community is emerging.

Q: How much does the choice of hub affect my chances of success? A: Significantly, but not decisively. A great product with a weak founder team will fail anywhere. A mediocre product with a strong team and the right hub will do better than the reverse. Hub matters most for access to capital and talent — it's a multiplier, not a guarantee.

What to do next

If you're leaning toward Lagos, read Yaba vs Lekki: where Lagos founders should base in 2026 to make the specific location choice, and then check every Nigerian startup hub and accelerator, ranked to find the right community.

If you're considering a multi-hub operation, our guide on operating across multiple African countries walks through the logistics and legal considerations.

Make your decision based on your market, your runway, and your network — not on which hub sounds coolest.