Payday is in talks with potential buyers, barely six months after receiving $3 million in a seed round backed by Nigerian fintech company, Moniepoint.
The CEO of the startup, Favour Ori, reportedly acknowledged to TechCabal that PayDay is having discussions with potential buyers. “Active conversations are being had with people who reached out and expressed interest in buying,”
In March, WeeTracker reported that Moniepoint was in talks to acquire Payday. The report stated that the acquisition would be completed in three months. According to the report, Favour himself shared the information. By May, there had been no news regarding the deal.
Attempts to sell the company may have been hampered by a wave of negative press.
PayDay acknowledged in August that it had restricted access to some customers’ accounts after learning that some had lost money as a result of fraud. An employee with knowledge of the situation declined to say how much money was lost, but they did acknowledge that PayDay temporarily banned access to numerous accounts to recover money that had been taken by individuals who took advantage of a weakness in Payday’s system that permitted currency arbitrage. According to TechCabal, “The company didn’t publicly acknowledge that it had restricted accounts until a publication accused the company of misappropriating customer funds,”
The company had to address internal problems in addition to responding to negative headlines. Several Nigerian employees’ salaries were allegedly cut by PayDay in July—three months after the $3 million raise—according to current and former employees.
Fewer than 10 of the company’s 60 employees were allegedly impacted, and PayDay intended to give the affected employees stock options as additional compensation, according to a highly placed source. Employees at PayDay informed Techcabal that the promised stock options had not materialised.
A number of staff left the company at the same time as those compensation cutbacks, including co-founder and COO Ogechi Obike. Obike described the reason for her leaving as a misalignment of goals in her resignation letter. Obike and Favour quarrelled at meetings, according to three current and former employees. “During meetings, he provoked arguments, particularly when she proposed alternative approaches different from his own,” TechCabal reported.
Favour has scaled back his involvement with the company recently. Except for a few occasions when he drops messages in the engineering channel, according to TechCabal, he is no longer as active as he previously was on the company’s Slack channel since he is too busy working full-time at GitHub. Elijah Kingson, a co-founder of PayDay, also works at Revolut, a fintech company based in London.
The co-founders declined to respond to comments when approached by TechCabal.
