The year 2023 proved to be turbulent for startups in Nigeria. Naira devaluation, funding scarcity, and the state of the economy all had a role in the demise of Nigerian startups this year, despite having raised over $70 million in investor capital in the previous two years by these startups who have shut down or exited.
Even if the startups failed for various reasons, their departure is already casting doubt on the future of a large number of up-and-coming, innovative startups that want to raise capital in the near future.
Nine startups with millions of investor dollars that would never be recovered failed, including 54Gene, which had raised $45 million, and Pivo Africa, which folded after raising $2.6 million.
Pivo
Pivo, a Nigerian fintech company that provided small supply chain companies with banking services, declared its closure earlier this month. This occurred a year after Y Combinator, Ventures Platform, Mercy Corp Ventures, and more than fifteen other investors contributed more than $2.6 million.
Two months after its founding, in July 2021, Nkiru Amadi-Emina, the CEO, and Ijeoma Akwiwu, the COO, raised a $100,000 pre-seed round from investors such Microtraction, FirstCheck Africa, and Rally Cap Ventures. Various reports attribute the company’s demise on the founders’ disagreement.
Lazerpay
Lazerpay, a web3 crypto payments startup, made waves when it was launched by 19-year-old Njoku Emmanuel and raised $1.1 million. To everyone’s astonishment, the company announced its closure on April 13, 2023. This occurred a few months after the business extended its runway by terminating several employees in order to attract investors, but the anticipated extra funding did not materialize.
54 gene
In September, 54gene, a genomics research startup that had raised US$45 million in three fundraising rounds, announced that it has begun to wind down its operations.
The corporation collapsed into chaos less than four years after it was founded, and in October 2022, Abasi Ene-Obong, the CEO, was replaced. Ron Chiarello, who started in March 2023, and Teresia Bost served as 54gene’s CEOs throughout the previous year. Chiarello quit his position in July. Venture capitalist Davidson Oturu stated that while some entrepreneurs had the best of intentions at first, their survival instincts led them to take immoral actions.
Bundle Africa
Bundle Africa, a Nigerian cryptocurrency firm, declared that it would close Bundle Africa, its social payments app. CEO Emmanuel Babalola stated in a tweet that the decision to shut down was made by stakeholders who desire a firm restructure.
This happened after the company raised $450,000 in a pre-seed round in which two investors participated. Unlike others, though, Bundle Africa’s investors might not have lost everything because the company is currently concentrating on Cashlink, its peer-to-peer platform. According to reports, the business reached over 3 million transactions on Cashlink, 50,000 monthly active users, and a $50 million monthly volume on Bundle.
Payday
Similar issues faced Payday, a finance startup, shortly after receiving $3 million in funding from Moniepoint-led venture round. Favour Ori, the company’s founder and CEO, was accused of forcing staff to accept wage reductions in order to maintain the company while giving himself a monthly compensation of $15,000. Customers had also made severe accusations of fraud against the fintech after having their accounts blocked for no apparent reason. It was revealed at the beginning of this month that Bitmama Inc., a blockchain payments company, has acquired Payday.
Zazuu
The fintech space were taken aback when Zazuu, a fintech business started in 2018 by four Nigerian entrepreneurs, Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO), announced on November 17, 2023, that it was closing.
The company’s management explained the shutdown by saying it was unable to get more growth capital from investors.
In July 2023, the company—an end-to-end money transfer marketplace that made it easier for people to send money back to friends and family in Sub-Saharan Africa—raised $2 million to expand its cross-border payment services and create the first-ever impartial payment platform globally.
They promised during last year’s funding round that it will keep expanding its user base, hiring more skilled workers, and increasing compensation with the Zazuu function, which enables in-app transactions.
Vibra
In December 2021, a group of international investors co-led African Blockchain Lab, Vibra, a Nigerian startup, raised $6 million in a pre-Series A round. That was exactly two years ago. The money was intended to help Africa Blockchain Lab launch new services like VIBRA Earn, a platform that allows users to save cryptocurrency assets and earn interest on a range of cryptocurrency assets. But the business stopped operating in July of this year, not just in Nigeria but also in Kenya and Ghana.
Okadabooks
Okada Books, a pioneer in digital publishing and bookselling that was founded in 2013 and was in operation for ten years, closed its doors in November of this year due to challenging socioeconomic conditions. Okadabooks was one of the twelve startups chosen for Google’s Launchpad Accelerator Africa in 2017.
Hytch
Hytch, a Nigerian logistics startup, announced in February that it had closed down just nine months after its founding. The business said on social media,“It has been a tough one but we are shutting down operations finally,” The company released a statement saying, “We would no longer be providing our services to businesses or individuals.” It was forced to close after failing to find more funds.
