The Biggest Scandals That Shook Nigeria’s Startup Space In 2020

“Nigeria should be on Netflix, or at least have its own YouTube channel.” That’s a line that pops up every other day on the space that is arguably the most entertaining social media platform in the country: Twitter.

And that’s probably because Nigeria has a way of making headlines and starting trends that resonate the world over, from the good to the bad and the downright ridiculous.

Just as the country tends to hog much of the attention on the continent in areas like entertainment and sports, the tech world seems to have become Nigeria’s newest theatre and stronghold.

In many ways, Nigeria is outdoing former frontrunners like South Africa, Kenya, and Egypt, in the area of tech startup activity.

Not only has Nigeria become the de-facto headquarters of venture capital that has been forked into the continent in the last few years, but the country also boasts an ever-expanding ecosystem that has scored some big wins; like the USD 200 Mn acquisition of Paystack, for example.

But that’s not to say there hasn’t been quite a number of horrible hiccups too. And the year 2020, in particular, saw quite a number of them.

2020: Some year!

A number of trends stood out in the Nigerian startup scene in 2020. Despite the quakes caused by COVID and the accompanying tales of doom and despair, startup funding stayed resilient with 129 Nigerian companies raising venture capital in 2020, according to the latest funding report by WeeTracker and AfriCo. No African country saw more.

Also, there was a rush of mergers and acquisitions (M&A) like never before, early-stage startups saw a lot of interest, and local investors grabbed the bull by the horn. The previous year was actually a win on so many counts.

However, one thing that seems to go unnoticed is the fact that 2020 also brought some major scandals in Nigerian tech. And in no particular order, here’s a recap of the biggest spats, some of which are still unfolding.

1. Carnage at Cars45

September 2020 had barely begun when the Nigeria-based online cars marketplace, Cars45, chose to give 11 of its ex-employees the “mugshot treatment” after what initially looked like the acrimonious exit of its co-founder/CEO, Etop Ikpe.

In a long-deleted post that went up on its Instagram and Twitter pages, Cars45 put together names and images of 11 ex-employees, some of whom are believed to have been among top management, stating that they are no longer part of the company.

What was off? Well, people leave companies all the time, nothing off about that. It’s just unusual for a company to plaster the faces of departed employees all over social media with a disclaimer that is essentially a warning to the public.

Cars45’s disclaimer mentioned that the individuals had left the company as of August 25, stating that “they are not authorised to represent the company in any matter whatsoever,” and “anyone dealing with them on behalf of Cars45 is doing so at his own responsibility.”

When WeeTracker questioned Cars45 about why it was necessary to put up the now-withdrawn broadcast distancing the company from the departed employees, a representative of the company said:

“The employees left on their own accord and we deemed it fit to inform our customers because we value transparency. It was simply our responsibility to let our customers know this change as they have been known with the business and without any communication from us, customers might still approach them for business regarding Cars45. Hence, we thought it best to let our customers know they are no longer representing Cars45 and the business as a whole.”

It was later rumoured that most of those 11 employees had left the company together with Ikpe who had stepped down from his position as CEO for unclear reasons, rumoured at the time to be something feisty at the board and management levels.

Ikpe reappeared a few weeks later having launched a new company, Autochek, which is also in the cars business. In an exclusive interview, Ikpe told WeeTracker that he “left Cars45 in good terms.” But that road rage from Cars45 after the earlier exits will always be a shocker.

2. Trouble at Tizeti

Last June, Tizeti Network Limited (also known as Wifi.com.ng or Tizeti) was in the news for the wrong reasons when it was reported that the CEO of the company, Kendall Ananyi, had been accused of sexual harassment by a former Entrepreneur-in-Training at the Meltwater Entrepreneurial School of Technology (MEST).

Kelechi Udoagwu who says she was Ananyi’s mentee, in a Twitter thread, said Ananyi had pulled out his “man parts,” put it in her hands, and asked if there was anything she could do. It looked like a forced solicitation of sexual favour.

Udoagwu co-founded Skrife, an online content development platform she launched in 2015 after meeting her co-founder during the MEST programme. She went on to serve as MEST Africa’s Head of Communication shortly after. According to her, the ordeal she encountered with Ananyi was quite disturbing.

This issue sparked a lot of outrage and led to long-ignored, much-needed conversations around sexual harassment in the local tech scene.

Ananyi denied the allegations and spoke of stepping aside to allow an independent investigation run its due course. 

Based on this investigation, it was determined by the independent legal counsel, which conclusion was accepted by the Independent Special Investigation Committee, that a case of sexual harassment had not been established. As a result, Ananyi was reinstated as CEO of Tizeti.

The unsatisfactory nature of the investigation that led to the conclusion sparked further outrage and left a bitter taste in some sections.

3. The Cellulant crisis

Cellulant was co-founded 17 years ago by a Kenyan, Ken Njoroge, and a Nigerian, Bolaji Akinboro. It’s one of the most prominent fintech startups on the African continent, boasting Pan-African operations in the world of payments across several countries.

It was Thursday, September 24, when word first got out that the Nigerian co-founder/co-CEO of Cellulant Corporation and CEO of Cellulant Nigeria, Bolaji Akinboro, had resigned from the fintech company he co-created in 2004. And the circumstances of his exit was anything but amicable.

The stories peddled about also had it that the “Cellulant crisis” had resulted in the “unethical terminations of more than 30 staff of Cellulant,” presumably individuals mired in whatever operational malpractice had occurred within the company.

In September, word got out that Cellulant’s agribusiness vertical, Agrikore, had to be shut down after some internal malpractice was uncovered. Cellulant did confirm to WeeTracker that an investigation revealed that 14 now-dismissed Agrikore employees had inappropriately received funds from Agrikore wallets.

In their statement, Cellulant also mentioned that Akinboro “resigned from all his management positions within the Cellulant group in late August as he’s responsible for the Agrikore platform.”

However, there have been many conflicting tales around the “true” happenings at Cellulant. The company’s account of the events that transpired continues to be disputed by some of the dismissed employees who point to a history of unhealthy governance within the company. Some of the ex-employees are known to have filed lawsuits, and there are rumours of a board conspiracy.

Also, the dynamics that forced Akinboro’s departure from Cellulant Corporation is a complicated matter that is still unravelling, and there are legal matters in court.

But for now, Akinboro, who has quite the track-record in deploying tech solutions to pressing problems across the continent and beyond, appears to have set sights on a new path by unveiling a new company, Voriancorelli.

4. The WeJapa matter

In the middle of August 2020, Favour Ori, founder of WeJapa; a startup that connects tech talents to jobs globally, was accused of manipulating software developers whom the startup was supposed to connect to jobs.

As reported by TechCabal, the “claims against Ori allege that he often underpaid or did not pay for work, undermined and berated people after disagreements and that he exaggerates his achievements to polish an unsavoury personality.”

After launching in April 2020, WeJapa garnered momentum and went on to receive up to USD 50 K equity funding from a number of angel investors, including the early-stage Nigerian venture capital firm, Microtraction. But the reports from aggrieved persons point to some egregious behaviour on the part of the founder.

Eventually, Ori delivered an apology “to all those who I have wronged” but denied allegations of fraud. He stepped down from leading his company to allow for an investigation, according to a statement that was later released by Microtraction.

Six weeks later, the investigator’s report concluded that the WeJapa founder had indeed done some misdeeds but had not exactly destroyed the business. Ori has since left the CEO position and become the startup’s CTO, and Hauwa Aguillard took over as CEO.

At the moment, the startup seems to be making progress with getting back on everyone’s good side after the unsavoury incident that almost ruined the business’ reputation.

Also worthy of mention in this recap is the fiery battle between funder and founder at the Nigerian pharmacy chain, HealthPlus, where there is an ongoing tug-of-war over who calls the shots, as well as the many troubles that put several Nigerian agritech startups in the mud.

Now, that’s some year.

Featured Image Courtesy: Inc