This year has been an exciting period for African startups with many acquisitions of seed rounds. Despite these, many others have downsized operations due to the high-cost operations and lack of funding. Published interviews with correspondents of these companies attributed the change in operations to a lack of funding.

Rather than outright closure, most companies took an operational turn by reducing the number of staff, and moving operations out of Nigeria, and Africa.

This article will highlight most of the African-based startups that fall under this category.

Vibra

Vibra, an African-focused cryptocurrency platform, co-founded by Vincent Li, informed its users by the 15th of July, 2023, that it was discontinuing operations via email. An exclusive from Techcabal revealed that employees were either asked to “resign or be fired”. This was done within the time the email for shutting down operations was released.

Although the email of the closure was sent out in July, operations fully ended in October with news outlets carrying the news. Vibra secured six million dollars in VC funding from investors. While the company website states that operations are still active in other countries like Ghana and Kenya, an official mail shared on their Telegram channel says otherwise. It stated that they were discontinuing operations in all African markets.

There has been no further information about recent developments.

LazerPay

A few months before its official shutdown in April, LazerPay CEO, Emmanuel Njoku shared on Twitter that the company was having a hard time raising additional capital. Before the shutdown, the company downsized its staff holding in November 2022.

The official memo shared that LazeryPay’s aim since its inception in 2021 was to drive crypto adoption globally and that it had helped over 3,000 businesses accept payments in stablecoin. The shutdown was attributed to a lack of funding and the inability to secure a fundraising round.

Parts of the official memo read as follows;

“Merchants are advised to withdraw their funds from the platform before the 30th of April, 2023 using the bank or crypto payout option. We encourage our community to stay in touch and reach out to us as the team will be available to answer any questions or concerns.

We welcome offers from companies who are interested in purchasing Lazerpay’s IP, and who would like to continue building the future of crypto payments. We are more than happy to talk further about how our technology works, and how we can help you set you up to build or integrate with it.”

Final Thoughts

As with businesses in every sector, mishaps are bound to happen. It is therefore necessary we treat company founders and CEOs with empathy and avoid peddling half-truths. It is worthy of note that these companies carried out due diligence and informed users and stakeholders alike about their closure. This allowed them to withdraw their funds on time.

Most discussions suggest that these developments were highly impacted by the FTX crash and persisting bear market during the first quarter of 2023.

Cover Image / GIS