Thepeer is shutting down three years after raising nearly $2.5 million from angel investors, institutional investors and other startups like Ezra Olubi, Byld Ventures and Stitch, respectively.
The fintech cited compliance issues and the slow adoption of wallets as a payment method. “Our unique service had its challenges, the first being compliance issues that hindered us from launching key wallet providers or maintaining their services. Additionally, the overall acceptance of wallets as a viable payment option didn’t grow as rapidly as we had hoped, this meant we had to spend a lot of time and resources educating people about what we do,” the company’s founders—Kosisochukwu Chike Ononye (CEO) and Michael ‘Trojan’ Okoh (CTO)—said in a statement on their website.
The API startup launched its beta in April 2021 to enable users of one fintech platform to send money directly to a user on another fintech platform. For instance, using Thepeer, a user could send money from Cowrywise to Eversend without passing through a bank account. Later on, the company moved on to building solutions for businesses—Direct Charge, a pull payment product and Checkout, an online payment gateway.
In June 2022, the company closed a Seed round of $2.1 million led by the Raba partnership, a VC firm that invested in Flutterwave and Stitch. At the time, Thepeer said it achieved an average transaction growth of 161% month-on-month (MoM) processing millions of dollars. As the business grew the company tapped Geneza Brands to rebrand in May 2023, perhaps in preparation for expansion.
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Challenges in Educating People About Their Service
Indeed, they had hinted at expansion to Kenya, South Africa, and Egypt during their seed round announcement. However, the process of educating people on the need for wallet interoperability, and convincing them to switch or complement their payment service providers with their solution took time and resources. “…we had to spend a lot of time and resources educating people about what we do”, says the founders.
Given the funding winter of recent months and the average burn rate of a seed-stage startup, it’s possible that the startup had no more runway and could not raise additional funds in the market. The average monthly burn of a seed-stage startup is $200,000 but applying the Africa discount, we expect it to be $60-100,000. So, in the 21 months since Thepeer’s last raise, they could have spent their $2.1 million or very close.
As difficulties mounted, Thepeer who has previously partnered with Flutterwave, a pan-African fintech unicorn, explored a consolidation and a pivot but it didn’t work out hence the shutdown. “We could not align our product with the market’s needs at our current size and scale,” the founders admit. “Faced with these challenges, we needed to make a key decision either to do a hard pivot, an M&A or return capital to investors. After carefully weighing our options, we decided that returning the remaining capital to investors was the best decision.”
The platform will be placed in maintenance mode until they find a new home for it.
