In a sobering reality check for Nigeria’s fintech ecosystem, Thepeer, a promising API startup that raised $2.1 million in seed funding just last year, has announced it is closing down operations. The shutdown comes as the company struggled to overcome compliance issues and slower-than-expected adoption of its innovative wallet integration platform.
Founded in 2021 by Kosisochukwu Chike Ononye and Michael “Trojan” Okoh, Thepeer set out to create an interconnected network allowing fintechs and businesses to seamlessly enable money movement between different digital wallets from within their respective apps. However, in a statement released on Monday, the startup admitted that exceptional technology alone was not enough to sustain operations.
“Our unique service had its challenges, the first being compliance issues,” the company said. “Additionally, the overall acceptance of wallets as a viable payment option didn’t grow as rapidly as we had hoped.”
Thepeer’s shutdown underscores the obstacles innovative fintech solutions can face when navigating complex regulatory landscapes and driving widespread user adoption, even with backing from prominent investors like Raba Partnership and BYLD Ventures.
The startup had bold ambitions, recording an impressive 161% average monthly transaction growth through early 2022 and laying out plans to expand across Africa. However, integrating with major wallet providers proved difficult amid compliance hurdles. Simultaneously, educating consumers on the benefits of wallet-based payments drained significant time and resources.
In the end, Thepeer’s founders decided returning investors’ remaining capital was the most prudent path forward rather than attempting a hard pivot or seeking an acquisition. “We’ll work to maintain the platform for as long as possible until we discover a new home for it,” their statement read.
Thepeer is the latest in a handful of Nigerian startups, including wealthtech Cova earlier this year, to opt for shutting down operations despite early investment and promise. As fintechs continue disrupting traditional financial services, the startup’s fate serves as a stark reminder that brilliant solutions alone do not guarantee success – clear regulatory paths and rapid user adoption are equally vital.
While Thepeer’s closure represents a setback for Nigeria’s fintech scene, it also highlights the importance of striking the right balance between innovation and pragmatism. As the ecosystem continues evolving, startups must carefully navigate complexities to turn incredible ideas into sustainable, compliant businesses that resonate with consumer needs.
