Some shareholders in the collapsed Nigerian API startup, Thepeer, have mentioned that they will take legal action against the founders if a clear audit of the company’s finances is not established.
- •According to Nigerian news sources, one of the shareholders inquired about US$ 1.2 million that was allegedly missing as of March 2024.
- •Thepeer’s co-founders Michael Okoh and Chike Ononye acknowledged that out of the US$ 2.1 million raised in seed funding, they had not received about US$ 750,000 from some pledges.
- •The shareholders calling for accountability and transparency were surprised when the startup’s co-founders announced closure on April 1 before the audit process as they had promised.
“We had a call where the team agreed to an audit the following week. The co-founders also claimed that US$ 750,000 never came in on that call. When we did the calculation, even though US$ 750,000 never came in, almost another US$ 500,000 is still missing,” the shareholder told Technext.
The co-founders pledged to return about US$ 350,000 to investors. The shareholders mentioned that the startup had a burn rate of about US$ 17,000, despite raking in only US$ 650. This is one of the reasons they feel short-changed.
“Assuming an operational period of 30 months — it launched in 2021 — the startup’s expenses amount to roughly $ 510,000. This should leave about US$ 1.6 million in the account. Yet, they are planning to return less than US$ 500,000 to investors,” another investor told Techpoint.
The investors also said that Okoh and Ononye had not provided a cap table that would prove whether the US$ 750,000 was never provided. The cap table is a document listing investment percentages during a startup’s founding round. The concerned shareholders have not expressly stated that Thepeer was mismanaged, but they are sceptical about the co-founders’ reluctance to produce an audit report and the cap table.
“I suspect that the co-founders want to avoid this entire audit and legal process by this shutdown. Because why would they decide to shut down when shareholders had requested an audit? About four shareholders co-signed a request to do an audit. If they keep failing to reply and do an audit, legal steps will be taken,” the shareholder said.
Thepeer’s closure
The startup’s founders shared a blog post on April 1 announcing the abrupt closure of the company over its inability to upscale operations. Thepeer faced regulatory setbacks that prevented them from onboarding wallet providers. For this reason, its founders did not believe they could ramp up its customer base at an intended pace.
“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. 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,” Thepeer stated in the blog post.
After the seed round, the company’s founders relocated to London. Some shareholders view this move as the genesis of the startup’s fall. It possibly estranged them from the realities of the Nigerian market.
Initially conceived to link Nigerian mobile wallets in ambitious scale, Thepeer raised a pre-seed round of US$ 220,000 from notable investors such as Flutterwave, Chipper Cash, Raba Partnership, Byld Ventures, and Musha Ventures.
Before closing down, Thepeer sought for acquisition deals from other startups to salvage its operations but the company stated that it could not find any meaningful interests.
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