Pivo, a Nigerian digital bank for trade backed by YC and run by women, has shut down.
Some African startups shut down in 2023 because of the lousy economy and a lack of funding. But Pivo is said to have shut down because of an ongoing conflict between the founders, according to people who know about the situation.
It was said that the fight between the founders, Nkiru Amadi-Emina (CEO) and Ijeoma Akwiwu (COO), hurt the company’s reputation, business relationships, culture, and team dynamics, which made it much harder for Pivo to raise money in the future.
In May 2023, the company’s investors intervened. A memo from the meeting by reporters stated that the founders’ employment contracts and agreements would be replaced to address some issues.
“An operational Board of Directors should be established immediately to guide the company’s leadership and safeguard the investors’ investments,” the note said.
Read also: Nigerian fintech startup Pivo raises $2 million in seed funding round
They closed a year after raising $2 million in seed funding, a rare for an African, female-founded, and female-led startup. In 2022, African startups received 1.2% of global venture capital. Data from AVCA shows that only 13% of African startups that received funding had a female CEO, and only 7% received VC funding in 2022.
Nkiru and Ijeoma bootstrapped Pivo for six months before raising funding. Pivo joined the summer Y Combinator 2022. The ODX accelerator program gave the company $125,000 for a 7% equity stake.
Pivo Capital and Pivo Business were lending platforms and business banks, respectively, until the shutdown.
In its seed round last year, Pivo Capital gave SMEs over $3 million with a 98% repayment rate. Pivo Business transaction volume increased by over 400% from April to September.
Friends-turned-business partners
In 2021, CEO Nkiru Amadi-Emina and COO Ijeoma Akwiwu founded Pivo. A birthday party introduced Amadi-Emina and Akwiwu six years earlier (2015). The pair founded the Abuja logistics company SourcePro based on their values. Their struggles inspired them to found Pivo, an African trade digital bank.
“I trust Nkiru with decisions, so starting a business with her was easy. She has foresight and guts. “I make strategic, calculated decisions,” said Akwiwu in a first-half 2022 company blog interview. It seems we complement each other. After seeing and growing through too much, Pivo was the perfect next step.”
A conflict between the duo may have started after the company announced its seed round in November 2022.
A year ago, Moe Odele, founding partner of Vazi Legal, an African tech law firm, told the press that “About half of the issues we resolve for founders immediately after fundraising has to do with co-founders’ relationship—and this is a critical issue
In a press interview last year, Pivo’s COO said she and her co-founder face work challenges despite being friends. Truthfully, every day is hard. Early on, Pivo set rules for how we should interact. Work issues are us versus the issue, not me versus you, “he said.
Why was Pivo closed?
Two years after the company launched, the founders fought. After the company announced its seed round in November 2022, it may have started.
Amadi-Emina ran another company while Pivo’s CEO, according to the information. She named Pivo’s secretary her brother, with whom she ran the other company. These angered co-founder Akwiwu, causing communication issues.
While we are yet to confirm the part Akwiwu played in Pivo’s demise, what we know is that their feud and inability to reconcile led this promising startup down the path of destruction.
As the conflict between the two intensified, Pivo’s investors intervened in May 2023 by laying down some guidelines for the company to continue to exist.
As part of the decisions reached by the investors, it was agreed that Ijeoma would resign from her role as COO and receive compensation. This entailed her signing a separation agreement formalizing the conclusion of her association with the company.
According to the investors’ memo, “The founders will devote their full business efforts and time exclusively to Pivo Inc., and shall not engage in any other business activities or ventures that may compete with or interfere with Pivo Inc.’s operations or interests.”
The investors say these measures may only partially satisfy either co-founder. Without them, Pivo has no compelling future or a way to continue supporting the company or your future ventures, “the memo read. “Moving forward, the investors expect co-founders to treat each other respectfully and refrain from disparaging or publicly maligning one another, the company, or the investors.”
Although intervened, a recent investor town hall meeting closed the company. The startup’s user transition is unclear.