Debacle at Dash

Investors Look To Offload Beleaguered Ghanaian Fintech Mired In Scandal

By  |  August 10, 2023

Dash, the Ghanaian fintech startup that raised a notably substantial seed round last year to revolutionize the African digital payments landscape, is facing an unravelling of its fortunes. The company’s major investors, sources say, are actively seeking to dispose of Dash’s assets, including its licenses, after a case of setbacks and a cloud of controversy.

Dash came onto the scene in 2019 with an ambitious vision: to bridge the gap between mobile money wallets and traditional bank accounts across Africa, facilitating seamless cross-border transactions.

The startup, operating under an entity known as Spektra Inc, set out to enable users from different countries—starting with Ghana, Nigeria and Kenya—to connect their bank or mobile money accounts to Dash, pay bills, and send and receive money; a single app for payments across borders. The playbook sought to draw revenue from processing fees, savings, FX fees, commissions, and subscriptions.

The company’s founder and CEO, Prince Boakye Boampong, garnered attention for his audacious plans and ambitious take on e-wallet interoperability, attracting investors keen on Africa’s booming fintech scene. However, Dash’s fortunes have taken a turn since it raised a total of USD 52.8 M in two separate funding rounds last year, leaving investors and observers alike bewildered.

Earlier this year, Dash’s fate seemed precarious as rumours swirled about the Founder’s suspension and investigations into alleged financial impropriety and misreporting. Boampong was replaced by the board and an audit was called, TechCrunch reported, citing sources that also said the founder secured a windfall in secondaries.

In a December 2022 investor update seen by WT, Boampong declared that Dash’s total users had grown to around 4.5 million in Q4 2022, with total payment value (TPV) hitting USD 560 M and revenue of USD 13.7 M in the same quarter. TPV in the previous three quarters stood between USD 500 M and USD 700 M with revenue ranging from USD 13 M to USD 18 M, the founder told investors.

Additionally, previous coverage by TechCrunch noted Dash’s markedly explosive growth spurt; going from 200,000 users and USD 250 M in transaction volume in October 2021 to 1 million users and USD 1 B in processed value by March 2022. This meant Dash had quadrupled its transaction volume and quintupled its user count within five months, per numbers shared by Boampong.

Subsequent investigation revealed the numbers and transaction volumes that once touted the company’s meteoric rise were elaborate fabrications intended to mislead investors, WT has learned from sources close to the matter who asked not to be identified.

Boampong, who previously co-led a YC-backed media startup, now finds himself suspended from Dash on allegations of falsifying figures and orchestrating a scheme to artificially inflate the startup’s growth figures. Efforts to reach Boampong for comments proved abortive as requests went unanswered.

A reversal of fortune

The initial revelations sent shockwaves through the tech industry and cast a shadow over the enterprise. With Dash’s future hanging in the balance and its founder’s conduct in question, the company’s leading investors are looking to cut their losses, persons privy to the discussions said, adding that documents have been exchanged.

Insiders indicate that three of Dash’s investors, including major backers such as Insight Partners and 4DX Ventures, are handling the sale, offering up Dash’s assets and eager to close fast.

The assets on the table, as of May, include licenses held by Dash in countries like Nigeria and Kenya, WT has learned, with offers of cash or equity being considered from parties willing to take over Dash’s assets. Insight Partners and 4DX Ventures, among the lead investors, did not respond to requests for comment.

Just over a year ago, Dash was revelling in the success of its ‘oversubscribed’ USD 32.8 M seed, the second-largest for a startup in Africa at the time which reportedly took its valuation to over USD 200 M. On the back of what appeared to be rapid growth of the business and team (which grew to 80+ employees), Dash closed a further USD 20 M debt facility from global funder TriplePoint Capital in October 2022 — bringing its total raise to around USD 86 M.

“The debt facility will be used to mitigate the liquidity challenges which continue to be a major issue for companies that do business in Nigeria. We intend on raising our next round in either Q1 or Q2 of 2023,” Boampong said in an investor update at the end of last year in which he also communicated the acquisition or processing of several licenses that would see Dash launch its merchant business and expand its consumer products to new corridors in 2023.

Two insiders however noted that Dash’s Microfinance Bank (MFB) license in Nigeria was revoked at the end of May. Previous reports suggest the startup drew some backlash from the Bank of Ghana, describing its activities as illegal and ordering an immediate discontinuation of operations, just days after last year’s seed round was announced. Neither Dash nor its founder addressed this matter publicly as subsequent questions from the press went unanswered.

Dash set out to connect digital wallets and redefine financial accessibility across Africa. However, the unseemly events that sources say have transpired over the past year have plunged the company into uncertainty as investors and stakeholders come to terms with the implications.

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