Why these 7 promising Nigerian startups failed in 2023

Different startups failed in 2023 due to leadership and monetary issues. The closures of these startups have raised eyebrows, leaving upcoming startups wondering about their fate. As the entrepreneurial space changes the reasons behind these failures serve as crucial lessons for new startups who are in or about to enter the market. This guide covers everything you need to know about why these 7 startups failed in 2023.

Why these 7 promising Nigerian startups failed in 2023

1. Lazerpay

Lazerpay was founded by Emmanuel Njoku in 2021 and was created to enable individuals and businesses to make payments using cryptocurrency globally in 150 countries. The startup shut down due to its inability to secure additional funding. 

Despite raising $1.1 million, the company faced challenges in closing a successful fundraising round. The team’s efforts to keep the company afloat were hindered by the failure to secure necessary funding, ultimately leading to the decision to cease operations.

The CEO of Lazerpay, Njoku, made a comment before the company shut down, stating that they tried to continue running the business but unfortunately, their efforts did not pay off. He also said that Lazerpay will continue to help its users move smoothly to avoid issues. 

In addition, he welcomes companies who would like to purchase the company and who would want to continue building crypto since they couldn’t. Finally, he announced that they will still do their best to enlighten people on how the crypto technology works and help integrate and build structure.

2. 54gene

Dr. Abasi Ene-Obong founded 54gene in 2019. This startup secured an impressive $45 million through three funding rounds. The company faced challenges with consistent leadership changes over the past year. Three CEO changes occurred, culminating in Ron Chiarello’s departure in July 2023. 

Chiarello confirmed financial struggles, revealing that 54gene began winding down in July due to an inability to sustain itself financially. This marked a significant turn for the company, which had initially shown promise with substantial funding.

3. Bundle Africa

The CEO of Bundle Africa, a Nigerian cryptocurrency firm, said in a tweet that stakeholders have chosen to shut the social payments app in order to reorganize the business. The business had secured $450,000 in a pre-seed round with contributions from two investors before this move. 

Bundle Africa’s investors may not have lost everything since the company is now concentrating on its peer-to-peer network, Cashlink. Furthermore, sources state that the business reached a $50 million monthly volume on Bundle and 50,000 active users per month. Also, Bundle exceeded three million Cashlink transactions.

4. Payday

After Moniepoint helped raise a $3 million seed round, this fintech company was shut down and was acquired by blockchain payments platform, Bitmama Inc. It was gathered from some sources that the CEO of Payday, Favour Ori, placed himself on a $15,000 salary which the company couldn’t afford. 

The company also had other issues coming from its customers accusing them of fraud. After all the allegations, the startup couldn’t continue business and it was acquired by another business.

5. Zazuu

Zazuu served as a platform for sending money into Sub-Saharan Africa and raised $2 million in July 2023 to enhance its cross-border payment service and create a fair payment platform. On November 17, 2023, the fintech company, founded in 2018 by four Nigerian entrepreneurs – Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO) – surprised the tech and finance industry by announcing the closure of its operations.

Zazuu was a fintech company that started in 2018. Initially, the startup showed promising signs with its goal of facilitating remittance payments into Sub-Saharan Africa. The company had garnered support from angel investors, including Babs Ogundeyi, CEO of Kuda Bank, and Jason Njoku, CEO of IrokoTV, during a fundraising round in July 2023. Other angel investors included Launch Africa, Founders Factory Africa, HoaQ Club, and Tinie Tempah.

The company’s management explained that the shutdown occurred because they couldn’t secure additional funding from investors to help the company grow. While securing funding last year, Zazuu promised to expand its user base, hire more talented people, and introduce a feature called “Pay with Zazuu” that allows users to complete transactions in the app. However, they were unable to stay afloat and had to shut down in 2023.

6. Pivo

Pivo was a Nigerian fintech that offered banking services to small supply chain businesses. After raising $2 million from Y Combinator, Ventures Platform, and Mercy Corp Ventures the startup folded up. The main reason for the shutdown was speculated to be the unresolved issues between the founders.

Before the company shut down, investors in May 2023 took action to address the situation. They released a memo with plans to replace the founders’ employment contracts and agreements with new ones, intending to rectify some of the challenges encountered.

7. Vibra 

Vibra was a cryptocurrency trading app developed by the African Blockchain Lab, in December 2021 by Vincent Li. The trading platform investors include CRE Venture Capital, LeadBlockDragonfly Capital, Hashkey Capital, SNZ Capital, Fenbushi, Cadenza Capital, Head & Shoulder X, Hash Global, Bonfire, Krypital, Despace, Lateral Frontiers VC, and many more.

The startup ceased its operations in Nigeria, Kenya, and Ghana in July 2023 after raising $6 million in a pre-Series A round. The startup founder Vincent Li announced the company would be shutting down but did not provide the reasons for shutting down.

Conclusion

These 7 Nigerian startups faced cessation due to several challenges in 2023. Lazerpay struggled to secure additional funding, leading to its shutdown. 54gene, despite securing $45 million, experienced leadership changes and financial struggles, resulting in its closure. Bundle Africa chose to reorganize, focusing on its peer-to-peer network, Cashlink. 

Payday faced financial issues, a CEO’s reportedly unaffordable salary, and customer fraud allegations, ultimately being acquired by Bitmama Inc. Zazuu, aiming to facilitate remittance payments, closed due to an inability to secure additional funding. Pivo, offering banking services, shut down amid unresolved founder issues. Vibra, a cryptocurrency trading app, closed operations without specifying reasons.