Nigerian fintech, PayDay, is trending on social media after a tech publication exclusively reported on Wednesday, September 21, that the company is looking to sell just six months after raising $3 million.
Here are seven facts we’ve gleaned from the situation which has since sparked mixed reactions in the tech ecosystem.
PayDay raised $3 million in March 2023
The Rwanda-based neobank, which helps “Africans send and receive money globally” raised $3 million in a seed funding round led by Moniepoint. Three weeks before the raise, an earlier report revealed that the fintech company was looking to raise $1.5 million to “grow its product and engineering team, expand its operations and get the required licenses for those expansions”. Fortunately for the startup, the round was oversubscribed to the tune of an extra $1.5 million.
Moniepoint didn’t acquire PayDay
After leading its $3 million seed roundup in March 2023, an executive at Moniepoint was reported to have said the investment in PayDay was “a strategic investment and not an acquisition.”
According to TechCabal, however, Moniepoint issued a letter of intent to acquire Payday, but months later, the board was no longer keen on the deal.
Fresh talks of acquisition in September 2023
In March 2023, PayDay’s CEO, Favour Ori, admitted to turning down a $15 million acquisition offer by an African unicorn due to PayDay’s profitability.
Six months later, talks of an acquisition were revealed to be ongoing. “Active conversations are being had with people who reached out and expressed interest in buying.”
Allegations against PayDay CEO
Former and current PayDay employees spoke out that their salary was reduced by 30-50% three months after the startup raised $3million.
A current employee was quoted to have said: “They told us that it was because the company wanted to be domiciled in Nigeria and was obligated to pay its resident employees in naira.”
Meanwhile, Ori maintained his monthly salary of $15,000 allegedly taking decisions out of the blue without carrying other members of the team along. A source was quoted to have said:
“There were instances when we would wake up to discover upcoming features through Twitter, and even the product team had no prior knowledge of these developments.”
Another said: “At times, he would suddenly take control of the company’s social media account to respond to customer complaints.”
The report of an acquisition barely six months after raising $3 million has stirred an onslaught of allegations against the startup’s CEO on social media.
PayDay’s COO, other employees, exit after salary slash
According to TC’s report, the fintech’s Chief Operating Officer (COO), Ogechi Obike, and some other employees, exited the company amid the salary reduction debacle.
In her exit note, she cited “misalignment of goals” as the reason for leaving the company. However, a company insider painted a picture of meetings where Obike and Ori clashed. “During meetings, he provoked arguments, particularly when she proposed approaches different from his own.”
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Favour Ori claims $15k salary lasted less than three months
In a Twitter thread written in response to TechCabal’s September 20 report, Ori admitted that the company faced challenges.
“The past few months have been challenging for us, but these moments serve as tests to demonstrate our commitment to fulfilling our promise of becoming the one-stop for Africans who want to transact globally.”
Ori claimed that adjustments have been made to the team structure, including remunerations for employees.
On the topic of his $15k monthly salary in the middle of a company-wide reduction, the CEO claimed he’d invested over $100k in the company and “gone months without taking a salary”.
According to him, the $15k salary lasted less than three months and was slashed afterwards.
PayDay’s CEO faced similar backlash in 2020
While PayDay’s potential acquisition has stirred mixed reactions, this isn’t the first time the company’s CEO will be found wanting in public discourse.
Twitter users made reference to August 2020, when he stepped down as CEO of WeJapa, a job sourcing platform.
At the time, Ori was accused of underpaying workers or not paying for work, berating people after disagreements and often exaggerating his achievements.
In an apology shared on social media, he apologised for his professional misconduct but maintained innocence concerning fraud allegations.
Source: Technext24
Source: Technext24
This is a developing story.
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