Afrigather Kippa, the Nigerian bookkeeping and finance startup backed by traders like Saison Capital and Horizone, misplaced ₦30 million to inner fraud related to Kippa Pay, its company banking product, two individuals with information of the corporate’s enterprise advised TechCabal.
The fraud occurred for a minimum of 4 months however was found in November, one month after the corporate shut down Kippa Pay and laid off 40 employees. Regardless of this, the corporate has determined towards paying these workers the severance packages it promised through e mail when the layoffs have been introduced. “Along with your month-to-month wage, you’ll obtain severance pay equal to your one month’s internet wage,” mentioned the e-mail seen by TechCabal.
Kippa didn’t instantly reply to a request for remark from TechCabal.
An inside job
The extent of the fraud was solely revealed in November when Kippa shut down its company banking product, Kippa Pay. The announcement of that shutdown led to huge withdrawals of funds from clients. Within the ensuing rush to withdraw funds, the corporate seen {that a} buyer with out a POS was additionally withdrawing massive sums of cash.
That particular person was a senior supervisor; three individuals with direct information of the matter advised TechCabal and the corporate found ₦30 million in one in every of his accounts. Whereas the particular person is not going to be named for authorized causes, he was arrested by the police in November however has now been launched.
Kippa has been within the information in current months after TechCabal solely reported that the fintech was shutting down Kippa Pay.
Ekezie-Joseph told TechCabal that the Naira devaluation influenced the choice to close down KippaPay. He additionally cited the struggles of the five hundred,000+ small companies on its platform and a market quickly altering whereas Kippa was nonetheless discovering product-market match.
“We had a major give attention to worthwhile retailers in tier-two cities, however the previous six months have been horrendous for them. Socioeconomic fluctuations have uncovered the volatility of this phase,” Ekezie-Joseph advised TechCabal in October. The product was later integrated into GPay, a cost subsidiary that Bloc, a enterprise financial institution, owns, in December.
Company banking, a hotly contested house, is capital-intensive. Firms have to purchase POS units, which greater than doubled in worth final yr whereas balancing different prices like know-how, buyer acquisition, managing relationships and offering assist. For a startup incomes in Naira, Kippa resorted to growing its costs, however its clients revolted, and it shortly backtracked.
“We tried to extend our costs to ₦35 to develop margins when devaluation kicked in. However the quantity of backlash the worth enhance was met with and the specter of person churn made us revert to ₦25,” Ekezie-Joseph mentioned.
