Nigerian Fintech PayDay Seeks Buyer Six Months After $3M Raise

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PayDay Fintech Mulls Company Sale Six Months After $3M Funding Round

PayDay, a Nigerian fintech firm, is currently engaged in discussions and is hopeful of reaching a deal to sell the company, just half a year after securing a $3 million investment.

Following a $3 million seed round led by Moniepoint, PayDay, the Nigerian fintech startup, is actively exploring potential buyers. Favour Ori, the CEO of PayDay, confirmed that the company is in discussions with interested parties. “We are actively engaged in conversations with individuals who have expressed an interest in acquiring us,” stated Favour to TechCabal.

In March, reports emerged that Moniepoint was in talks to acquire PayDay, and there were private indications that the deal would be finalized within three months. However, by May, there had been no updates on the deal’s progress.

It’s worth noting that despite PayDay’s willingness to be acquired even before its seed round, the deal with Moniepoint did not materialize, reportedly due to reservations from Moniepoint’s board. Nevertheless, TechCabal has verified that discussions to sell the company are ongoing.

The company has faced challenges, including negative publicity, possibly impacting its sales efforts. In August, PayDay acknowledged suspending access to customer accounts due to fraudulent activities, where customers lost funds. The company temporarily restricted access to these accounts to recover stolen funds, which resulted from a loophole exploited for currency arbitrage. This action was only publicly disclosed after being accused by a prominent blog of mishandling customer funds.

In addition to external challenges, PayDay faced internal issues, including a controversial salary adjustment. Some Nigerian staff had their salaries reduced by 30-50% in July, three months after the $3 million funding round. The company cited the need to align these salaries with local pay standards, and it had plans to compensate affected employees with stock options. However, employees claimed that these stock options never materialized.

The dissatisfaction among employees was exacerbated by the fact that the CEO, Favour Ori, continued to receive his monthly salary of $15,000, even though others saw reductions. Several employees left the company during this period, including the Chief Operating Officer, Ogechi Obike, who cited goal misalignment as her reason for departure.

It’s worth noting that Favour Ori’s leadership style, characterized by unexpected decisions and direct customer engagement through social media, has garnered mixed opinions among employees.

Favour’s Hiring Approach and Founder’s Impulsiveness at PayDay Fintech

Several individuals have pointed out that Favour had a consistent practice of recruiting top talent from well-known startups, primarily through social media platforms. However, once these talented individuals joined PayDay, they often found themselves constrained by Favour’s directives, which limited their ability to implement their own ideas. This restriction often hindered them from applying their expertise effectively.

While some have raised concerns about this pattern, a member of PayDay’s management, who preferred to remain anonymous, offered a different perspective. “The team is facing numerous challenges, and everyone is under a lot of stress,” the source explained. “I can’t say that anyone left solely due to dissatisfaction.”

The founder’s impulsive decision-making also had consequences. Customers experienced issues such as losing money while attempting to create virtual cards or being unable to access their accounts. An employee at PayDay revealed, “All of these problems arose because Favour abruptly switched our previous Mastercard provider to a new one, with minimal to no prior vetting. As soon as the switch occurred, we were inundated with a wave of customer complaints.” The company has stated that it has refunded all affected customers.

More recently, Favour has reduced his involvement in the company. “He is no longer as active on the company’s Slack channel as he used to be, except for a few instances when he drops messages in the engineering channel,” according to a source. It has also been disclosed that Favour is working full-time at GitHub while actively pursuing the sale of PayDay. Earlier this year, during a team hangout, Favour revealed his GitHub work ID when introducing himself, implying that PayDay was more of a side project. Additionally, PayDay’s co-founder, Elijah Kingson, is employed at the London-based fintech company Revolut. Both co-founders have chosen not to comment on these developments.

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WRITTEN BY

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Engr. Jamiu Abiola Alapoowo, Honney (Mos,Wd,Gd), is a Web and Graphics Designer, Model, Actor and Blogger
CEO/ Founder at HonneyMade, the Parent company of Himusic and Honney Media.
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