At the very least two traders in The Peer, the API startup backed by firms like Flutterwave and Sew, have requested for an audit of the corporate’s accounts because it prepares to return leftover capital to traders. Following the enterprise’s dissolution, traders are anticipated to obtain about twenty cents on the greenback, individuals conversant in the conversations advised TechCabal.
Nonetheless, the refund could take longer than anticipated as two traders have requested an audit of The Peer’s funds and requested for extra particulars on its cap table. The request for an audit—prompted by a November investor report displaying a financial institution stability of $450,000—was initiated in March, weeks earlier than the corporate shut down.
“The funds left within the firm’s account have been about one million {dollars} quick, based mostly on estimated firm spends and time-frame,” one e-mail despatched to co-founders—Michael Okoh and Chike Ononye—in March 2024 learn.
The co-founders haven’t responded to the audit request and haven’t shared the cap desk mentioned one investor who requested to not be named. “They’re avoiding it, considering that if they don’t discuss it, the matter will die,” an investor advised TechCabal.
The discrepancy within the firm’s stability and what some traders anticipated is linked to a declare by the cofounders, Chike Ononye and Michael Okoh, that some traders didn’t honor capital calls of their June 2022 fund increase.
Chike Ononye, The Peer’s cofounder, didn’t reply to a number of requests for feedback.
Regardless of asserting a $2.1 million increase, the founders advised one investor they didn’t obtain $750,000. One other investor repeated this declare. Not one of the individuals who spoke to TechCabal for this story knew the investor who reneged on the funding dedication.
At the very least two traders have been unaware of the $750,000 shortfall in that funding spherical, individuals with direct information of the matter claimed. An audit of the corporate’s financial institution statements is anticipated to offer solutions.
There are additionally some questions on how the corporate used its funds, because it reported burn charges of about $17,000 month-to-month. “The Peer was capital environment friendly throughout its operations,” one investor mentioned.
Nonetheless, at the least two different traders have questions.
“That they had solely about 10 staff; the server prices must have been low as they didn’t course of plenty of transactions attributable to low adoption, so it was onerous to know why solely so little cash was left,” one particular person with information of the corporate’s operations advised TechCabal.
The Peer’s shutdown didn’t shock traders
By December 2023, the tone of investor updates urged the founding group was misplaced and jaded, one investor shared.
Regardless of having a fame as wonderful coders, The Peer’s cofounders, who got down to join wallets by its APIs, had issue fashioning a workable enterprise mannequin.
The startup was introducing a brand new option to make funds in a market however struggled to persuade companies to combine its fee answer. It built-in 82 companies in its lifetime, and solely 25% have been energetic.
The startup’s answer, which promised interoperability between wallets, might solely scale if it had sufficient companies on its platform however a failure to accumulate sufficient companies meant that product-market-fit was elusive.