PayDay: Why is Fintech for sale after a $3 million raise?

by MMC
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Nigerian fintech, PayDay, is trending on social media after an exclusive tech post reported on Wednesday, September 21, which the company is looking to sell just six months after raising $3 million.

Here are seven facts we gleaned from the situation that has since sparked mixed reactions across the tech ecosystem.

PayDay CEO: Favor Ori

PayDay raised $3 million in March 2023

The Rwanda-based neobank, which helps “Africans send and receive money around the world,” has raised $3 million in a seed funding round led by Moniepoint. Three weeks before the increase, one sooner report revealed that the financial technology company was looking to raise $1.5 million to “grow its product and engineering team, expand its operations, and obtain the required licenses for these expansions.” Fortunately for the startup, the funding round was oversubscribed by an additional $1.5 million.

Moniepoint did not acquire PayDay

After leading its $3 million fundraising in March 2023, a Moniepoint executive reportedly said the investment in PayDay was “a strategic investment and not an acquisition.”

However, according to TechCabal, Moniepoint issued a letter of intent to acquire Payday, but months later the board was no longer supportive of the deal.

New acquisition discussions in September 2023

In March 2023, PayDay CEO Favor Ori admitted to turning down a $15 million acquisition offer from an African unicorn due to PayDay’s profitability.

Six months later, discussions about an acquisition were revealed to be underway. “Active conversations are taking place with people who have reached out and expressed interest in purchasing.”

Allegations against PayDay CEO

Former and current PayDay employees said their salaries were cut by 30% to 50% three months after the startup raised $3 million.

A current employee was quoted as saying: “They told us it was because the company wanted to be domiciled in Nigeria and was obliged to pay its resident employees in naira. »

During this time, Ori maintained his $15,000 monthly salary, allegedly making decisions on the spur of the moment without coaching other team members. A source was quoted as saying:

“There were instances where we woke up to discover upcoming features via Twitter, and even the product team had no prior knowledge of these developments.”

Another said: “Sometimes he would suddenly take over the company’s social media account to respond to customer complaints. »

The announcement of an acquisition just six months after raising $3 million sparked a wave of allegations against the startup’s CEO on social media.

PayDay COO and other employees leave after pay cut

According to the TC report, the fintech’s chief operating officer (COO), Ogechi Obike, and a few other employees, left the company amid the salary cut debacle.

In her departure note, she cited “misalignment of goals” as the reason for her departure from the company. However, a company insider painted a picture of meetings in which Obike and Ori clashed. “During meetings, he provoked arguments, especially when she proposed approaches different from his. »

READ ALSO : 11 Ways to Instantly Recognize a Nigerian Tech Bro

Favor Ori claims his $15,000 salary lasted less than three months

In a Twitter thread Writing in response to TechCabal’s September 20 report, Ori admitted that the company was facing challenges.

“The past few months have been difficult for us, but these moments serve as tests to demonstrate our commitment to delivering on our promise to become the one-stop-shop for Africans to transact globally. »

Ori claimed that adjustments had been made to the team’s structure, including employee compensation.

On his $15,000 monthly salary amid a company-wide cut, the CEO claimed he had invested more than $100,000 in the company and “had spent months without receiving a salary.

He said the $15,000 salary lasted less than three months and was then reduced.

PayDay CEO faced similar backlash in 2020

Although PayDay’s potential acquisition has been met with mixed reactions, this is not the first time the company’s CEO has been missing from public discourse.

Twitter users referenced August 2020, when it resigned as CEO of WeJapa, a job search platform.

At the time, Ori was accused of underpaying workers or not paying for work, berating people after disagreements, and often exaggerating his accomplishments.

In an apology shared on social media, he apologized for his professional misconduct but maintained his innocence regarding the fraud allegations.

PayDay: Why Fintech Is For Sale After $3 Million Raise

Source: Technext24

PayDay: Why Fintech Is For Sale After $3 Million Raise

Source: Technext24

This is a developing story.

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