Nigeria’s antigraft body, the Economics and Financial Crimes Commission (EFCC), has taken Dr Olumide “D.O” Olusanya—the founder of Kloud Commerce, which shuttered under acrimonious circumstances—into custody, sources say.
WT learned from individuals close to the matter, who asked not to be identified, that officers of the EFCC came for D.O Monday in the middle of a meeting at the Lekki offices of Gloopro, one of the business ventures led by the embattled entrepreneur who had previously made strides in retail e-commerce via the now-defunct Gloo.ng.
D.O remains detained at the time of publishing this report, two sources confirmed, including a former executive at the now-shuttered startup, Kloud Commerce, whose investors have taken the matter of the debacle to the authorities alleging malfeasance, among other things.
“He consistently provided updates with false information to evidence a growth in the business and further deceived us into believing that indeed, the process was progressing,” reads part of an earlier drafted petition by investors seen by WT. Efforts to get further clarification as to whether the EFCC moved on that particular petition and the investors that ultimately signed off have proved abortive up to this point, as have efforts to ascertain the status of his detention and what is to follow.
Kloud Commerce (formerly PayPecker) landed USD 765 K in pre-seed in 2021 to build a multi-channel commerce solution for African businesses, starting in Nigeria. However, the startup closed its doors a year later, as earlier reported by WT, following a protracted period of questionable management and disputes that left the company crippled for several months. At least 18 institutional and individual investors had furnished Kloud Commerce with capital, including Zedcrest Capital, Niche Capital, and Afropreneur Angel Syndicate, among others.
Former executives and employees who worked with D.O at Kloud Commerce had, in interviews with WT, painted a picture of an abrasive founder who was painting a rosy picture to investors despite scarce progress while continuously shattering the motivation of the team he had assembled.
There was subsequently an impasse between the founder and investors who say efforts to salvage the flailing venture amid a cash crunch was sabotaged by the founder’s uncooperative stance.
WT understands that some disgruntled investors have drawn the intervention of Nigeria’s fraud-combating agency body against D.O over allegations of misleading investors and fraudulently obtaining money under false pretence. A known legal representative of D.O did not immediately respond to a request for comment.
In the earlier petition dated August 8, 2022, seen to be addressed to the EFCC, it is alleged that D.O misappropriated company funds, citing an account audit that suggests the founder had diverted various sums of money invested into Kloud Commerce for personal ventures, put personal expenses on the company’s tab, and burned investor money on expensive hotels and car rentals on ill-advised trips outside Nigeria.
“It has become obvious to us that Mr. Olusanya simply defrauded us and took the funds under false pretence, having provided falsified data and promises to deceive investors. Upon confrontation, Mr. Olusanya provided no useful explanation as to how the funds invested in the company were used without the approval of investors, or evidence of its utilisation,” the investors claim.
In an email dated September 2, 2022 seen by WT, D.O addressed Kloud Commerce employees (who by then had gone several months without pay after the company ran out of funds), claiming he was being forced out.
Kloud Commerce, which had been in limbo for five months due to the intractable disagreements and unending disputes, would eventually grind to a halt. At a virtual all-hands meeting that took place around noon on Friday, September 30, 2022, D.O addressed the few employees who showed up for what would be the last time, informing them that the company would permanently cease operations effective immediately.
Aggrieved investors who spoke to WT last October had mentioned that serious consideration was being given to taking the matter to the EFCC. Recent events suggest a resolve to go through with it.
This is a developing story – to be updated as more information surfaces.
