PayDay Mulls Sale Amid Management Crisis
By Adedapo Adesanya
Neo-bank, PayDay, may get a new owner as its founders, which include Mr Favour Ori, are considering a sale in the coming months, per sources who spoke exclusively with TechCabal.
According to the report, the company is in the process of being sold, with some developments that followed the exit of its co-founder and Chief Operating Officer (COO), Mrs Yvonne Ogechi Obike.
In March, the company raised $3 million to expand its footprint into the United Kingdom and Canada. This round was led by Moniepoint Inc. and saw contributions from HoaQ, DFS Lab’s Stellar Africa Fund, and Ingressive Capital Fund II.
In addition to fresh injections from existing investors like Techstars, Angels Touch, Ingressive Capital & Now Venture Partners, angel investors like Mr Dare Okoudjou, Founder and CEO of MFS Africa, and Mr Tola Onayemi, CEO of Norebase also pitched in.
This brought PayDay’s total investment to $5.1 million, following the over $2 million pre-seed round closed in 2021.
Days after the seed round, it was widely reported that Moniepoint would acquire the company with plans to make it official by the end of Q2 2023, adding that investors and advisors were in the know.
According to TechCabal, Moniepoint failed to move ahead with the deal as the management was not keen on the deal.
It was also revealed that Mr Ori moonlighted at the startup which he founded with Mr Elijah Kingson in 2021 as he had a paying job at Github. His partner worked with UK-based fintech Revolut.
It was also alleged [and disputed] that there were rifts between management, especially between Mr Ori and Mrs Obike as the former COO was exempt from top meetings.
On remuneration, it was disclosed by current and former employees that three months after the $3 million raise, PayDay slashed salaries as well as reneged on paying in Dollars as agreed. The reason given was that “because the company wanted to be domiciled in Nigeria and was obligated to pay its resident employees in Naira.” This will be remedied with stock options, per the report.
Mr Ori confirmed that he earned $15,000 after the raise, but this has been slashed to check the company’s burn rate.
Also adding to the fray were veto decisions carried out by the CEO, which the report said included making decisions on a whim, announcing features ahead of directives to the development team, and taking charge of the social media accounts to respond to queries.