One of Nigerian fintechs, Theeper, is shutting its operations nearly two years after raising $2.1 million in a Seed round.
The company’s founders cited compliance issues as one of the main reasons they decided to wind down. They also blamed it on the slow acceptance of wallets as a viable payment option in Nigeria contrary to their expectations at the beginning of the business.
In an uncommon gesture in the history of Nigerian startups that have shut down in recent times, the founders said they would be returning unspent capital to their investors. They, however, did not disclose the amount to be returned to the investors.
Theeper’s Seed round had participation from angel investors, institutional investors, and other investors like Ezra Olubi, Byld Ventures, and Stitch.
Theeper’s sunset
Announcing the decision to shut down the company via a statement released on Monday, Theeper’s founders—Kosisochukwu Chike Ononye (CEO) and Michael Okoh (CTO), said:
- “April 1st holds significant meaning for us. Is it a day of playful pranks, or a nod to our founding date? Perhaps a subtle homage to Apple’s beginnings. Yet, regrettably, it also marks the sunset of our journey.
- “We embarked on a mission to create something unprecedented, a unique method for transferring money between digital wallets and making payments for goods and services directly from these wallets. Yet, we soon realized that exceptional technology alone wasn’t sufficient.
- “Our unique service had its challenges, the first being compliance issues that hindered us from launching key wallet providers or maintaining their services.
- “Additionally, the overall acceptance of wallets as a viable payment option didn’t grow as rapidly as we had hoped, this meant we had to spend a lot of time and resources educating people about what we do.
- “Faced with these challenges, we needed to make a key decision either to do a hard pivot, an M&A or return capital to investors. After carefully weighing our options, we decided that returning the remaining capital to investors was the best decision.”
- “We could not align our product with the market’s needs at our current size and scale. What does this mean for our customers? Thepeer will be placed on maintenance mode for the interim. We’ll work to maintain the platform for as long as possible until we discover a new home for it,” they added.
What you should know
The API startup launched its beta in April 2021 to enable users of one fintech platform to send money directly to a user on another fintech platform.
For instance, using Thepeer, a user could send money from Cowrywise to Eversend without passing through a bank account. Later on, the company moved on to building solutions for businesses—Direct Charge, a pull payment product and Checkout, an online payment gateway.
In June 2022, the company closed a Seed round of $2.1 million led by the Raba partnership, a VC firm that invested in Flutterwave and Stitch.
By June 2022 when the company closed its $2.1 million Seed round, Thepeer said it achieved an average transaction growth of 161% month-on-month (MoM) processing millions of dollars. As the business grew the company tapped Geneza Brands to rebrand in May 2023, perhaps in preparation for expansion.
They had hinted at expansion to Kenya, South Africa, and Egypt during their seed round announcement. However, the process of educating people on the need for wallet interoperability, and convincing them to switch or complement their payment service providers with their solution took time and resources.