Nigerian Crypto Startup Lazerpay is Shutting Down: Here’s Why
Lazerpay, a Nigerian crypto payment startup recently announced it was shutting down. The announcement which was contained in a statement shared on Twitter noted that they were ceasing operations after a long fight to keep the startup in operation.
Founded in 2021, Lazerpay allows businesses to accept crypto payments from their customers by integrating a collections widget in their apps and collecting payments through a link. Its founder, Njoku Emmanuel, once told newsmen that the startup aims to drive financial inclusion and interoperability in Africa. He added that the startup is building a gateway where Africans will be able to send and receive crypto using their local currencies.
With these goals at heart, the crypto startup has enabled over 3000 businesses to accept payments in stablecoins all over the world. Also, it has improved its core payment gateway and added off-ramp features to help merchants convert their crypto to fiat directly into their bank accounts in over 100 countries.
Looking at Lazerpay’s goals and the achievements recorded so far, it becomes pertinent to ask why the Web3 company is shutting down. Let’s examine the following points.
Trouble securing funding
In a statement signed by Lazerpay Founder, Njoku Emmanuel and addressed to stakeholders, the startup noted that it had tirelessly laboured to secure the necessary funding to keep Lazerpay going. Njoku said, “Despite our team’s tireless efforts to secure the necessary funding to keep Lazerpay going, we were unable to close a successful fundraising round.” He added that “Merchants are advised to withdraw their funds from the platform before the 30th of April 2023 using the Bank or Crypto payout option.”
Failed deal with proposed lead investors
In November 2022, Lazerpay released an operational update which revealed that their proposed lead investor pulled out abruptly due to market conditions and disagreement on terms. The statement which was shared via their verified Twitter handle reads, “Earlier this year, we began raising our seed round and had interest from investors. Unfortunately, our proposed lead investor pulled out abruptly due to market conditions and disagreement on terms. This impacted our inability to complete this round.” The failed deal which made them change their fundraising strategy is one of the reasons why they are shutting down.
Inability to pay employees
Lazerpay is also shutting down because of its inability to pay employees. Its inability to pay employees is an offshoot of the failed deal with proposed investors. Before announcing layoffs last year, reports say that its management team stopped receiving salaries, while its employees’ salaries were reduced. This did not help as the company had to let go of some “incredibly talented team members.” In the layoff announcement, the crypto startup said, “With their permission, we will share a list of our outgoing colleagues with companies within our network.”
Rejected an unfavourable acquisition offer from an existing investor
Newsmen reports that the financial woes of Lazerpay can also be attributed to the rejection of an unfavourable acquisition offer from an existing investor. While details around this news are sketchy, Lazerpay has expressed willingness to sell its IP. Njoku in the recent announcement said, “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 set you up to build or integrate with it.”
Disconnection with Paystack’s Shola Akinlade, Nuwa Capital, Voltron Capital and Nestcoin
Reports say Paystack was previously supported by Shola Akinlade of Paystack, Nuwa Capital, Voltron Capital and Nestcoin. Before Lazerpay’s launch in 2021, it received an undisclosed amount of investment from Nestcoin — an innovative venture that builds, operates and invests in products making crypto accessible to everyone. And, Nestcoin earlier had to lay off staff because it held investor funds in FTX which crashed last year.
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