Nigerian fintech PayDay, after securing a $3 million seed funding round six months ago, is now in talks to be sold.
According to a member of PayDay’s management, the company was open to acquisition before its seed funding round which was led by Moniepoint.
In March, a report speculated about Moniepoint acquiring PayDay, with a journalist privately predicting a three-month deal.
According to an insider close to the situation, Moniepoint had expressed their intention to acquire PayDay contingent upon specific conditions or criteria that needed to be satisfied before proceeding with the acquisition.
However, the deal remained in limbo, with sources suggesting that Moniepoint’s board was not enthusiastic about the acquisition. It’s possible that PayDay did not meet the required conditions for the deal to progress as initially anticipated.
Despite Moniepoint pulling out of the deal, talks to sell the company are still ongoing. Nonetheless, negative publicity may also be hindering the company’s sale.
In August, PayDay suspended customer accounts to recover funds lost to fraud. Per a source, the company did not disclose the losses until a prominent blog accused them of mishandling customer funds. Furthermore, some Nigerian employees claim their salaries were slashed in July—three months after the $3 million raise, while the CEO, Favour Ori, maintained a $15,000 monthly salary. These salary reductions coincided with the departure of key employees, including co-founder and COO Ogechi Obike.
As the company continues discussions about a potential sale, sources disclose that Ori has reduced his involvement in the company and has been working full-time at GitHub, implying that PayDay was a side hustle.
