PayDay Considers Sale Amidst Internal Strife – In the rapidly evolving world of fintech, Neo-bank PayDay is reportedly on the brink of a significant change. Amidst management issues and internal turmoil, there’s buzz about a possible sale of the company.
The Backdrop
PayDay, co-founded by Mr. Favour Ori, has been a notable player in the neo-banking space. But recent developments, especially following the departure of its co-founder and COO, Mrs. Yvonne Ogechi Obike, have caused ripples in its trajectory.
Recent Fundraising Success
Back in March, PayDay secured a whopping $3 million to bolster its expansion into international territories, specifically the UK and Canada. This investment round witnessed the leadership of Moniepoint Inc. and included contributions from prominent entities like HoaQ, DFS Lab’s Stellar Africa Fund, and Ingressive Capital Fund II.
Furthermore, existing investors and notable angel investors also bolstered PayDay’s coffers. Collectively, these efforts took PayDay’s total investments to an impressive $5.1 million. This is in addition to the over $2 million pre-seed round they clinched in 2021.
Acquisition Rumors and Fallout
Shortly after this fundraising success, there was a flurry of reports suggesting that Moniepoint was poised to acquire PayDay. Insiders even hinted that the deal would be formalized by the end of Q2 2023. However, TechCabal’s sources indicate that Moniepoint decided against progressing with the acquisition, primarily due to management’s reservations.
Management Intricacies and Controversies
Digging deeper into the management dynamics, it surfaced that Mr. Ori had been balancing roles, both at PayDay and at Github. Meanwhile, his co-founder, Mr. Elijah Kingson, was associated with the UK-based fintech, Revolut.
Tensions within the top tier of the company became evident, especially between Mr. Ori and Mrs. Obike. Allegedly, the former COO, Mrs. Obike, was often sidelined from pivotal meetings.
Furthermore, in a surprising move post the $3 million raise, PayDay opted to cut salaries and reportedly backtracked on its commitment to pay employees in Dollars. The justification provided was the company’s intention to base itself in Nigeria and the ensuing obligation to compensate its local employees in Naira. To offset this change, stock options were offered to the staff. Mr. Ori’s remuneration too saw a reduction to control the company’s expenditure rate.
Adding another layer of complexity were certain CEO-driven decisions that raised eyebrows, including impulsive decision-making, premature feature announcements, and personally managing the company’s social media interactions.
PayDay’s journey offers a riveting glimpse into the challenges and complexities startups face. While the company’s future remains uncertain, its tale underscores the importance of cohesive management and transparent decision-making in the world of business.