The abrupt closure of Thepeer, an API-driven startup, has sparked a wave of concern among its investors.
The company, which had once set out to revolutionise wallet-based payments in Nigeria, found itself at a crossroads, leading to a shutdown that has left stakeholders clamouring for transparency and accountability.
Launched with much fanfare and the backing of heavyweight investors, Thepeer aimed to be at the forefront of Nigeria’s digital payment solutions. With a hefty $2.3 million war chest from two funding rounds, the startup attracted the attention of industry giants like Rallycap, Sunu, and Timon Capital, along with fintech leaders Flutterwave and Chipper Cash. The vision was clear: to make wallet transactions a norm in Nigeria’s bustling markets.
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However, the journey from a groundbreaking idea to a sustainable business model is fraught with challenges. Thepeer’s co-founders, Michael Okoh and Chike Ononye, faced the daunting task of convincing users and merchants to adopt a new payment method. Despite their efforts, the integration of wallets remained an arduous task, each requiring a unique setup that drained resources faster than they could be replenished.
Shocking termination of Thepeer startup
On April 1, 2024, the founders announced the shutdown, citing difficulties in user onboarding and a labyrinth of regulatory hurdles. The decision shocked many, especially since it followed closely on the heels of a shareholder’s audit request. Thepeer’s inability to scale became its Achilles’ heel, with Ononye admitting the underestimated complexities of customer acquisition.
The startup’s financial health soon became a focal point of discussion. With a monthly burn rate of $17,000 and meagre revenues, questions arose about funds management. Investors were puzzled by the discrepancy between the reported expenses and the remaining capital, prompting calls for a thorough audit.
As the dust settled on Thepeer’s operations, the silence from the founders only intensified investor unrest. Documents obtained revealed a lack of communication, with some shareholders left in the dark for months. The founders’ claim of receiving only a fraction of the announced seed funding fueled the fire, with no evidence to support their statement.
The final straw came with the revelation of an email from CEO Chike Ononye informing investors of the impending closure and the return of remaining funds. The request for confidentiality until a public announcement raised eyebrows, further entangling the situation.
Read also: Nigerian API-based Startup, Thepeer Raises $2.1M Seed Led by Raba Partnership
Thepeer’s Aftermath
Thepeer’s shutdown has opened Pandora’s box of investor scepticism and the need for stringent oversight in the startup ecosystem. The call for an audit is not just about financial reconciliation; it’s a demand for transparency that could set a precedent for future endeavours. As the fintech sector evolves, the lessons learned from Thepeer’s rise and fall will undoubtedly shape the narrative of startup stewardship in Nigeria and beyond.
In a market where trust is currency, the actual cost of Thepeer’s shutdown extends beyond the balance sheet. It’s a stark reminder that innovation must go hand in hand with accountability and that every visionary leap should be grounded in operational reality. The investors’ quest for an audit is more than a search for missing funds; it’s a pursuit of trust, which, once lost, is the most complex asset to regain.