Thepeer, a Nigerian startup has announced that they will be shutting down operations after just three years.
Described as an API-based payment layer, Thepeer has cited compliance issues and problems with acceptance of the product.
The company will return what is left of its funding to investors, especially as a pivot or merger & acquisition is not an option.
The founders, Michael Okoh and Chike Ononye, said, “Thepeer will be placed on maintenance mode for the interim. We’ll work to maintain the platform for as long as possible until we discover a new home for it.”
The startup’s shutdown is coming almost two years after it raised $2.1 million in a seed round led by Raba Partnership, an early investor in Flutterwave and Stitch.
Thepeer’s value proposition was to be an “API-based payments layer where fintechs can enable money movement natively from within their respective wallets and apps,” George Rzepecki, founder of Raba Partnership said after the company’s seed funding.
Okoh, Thepeer CTO, explained how the product worked to Techpoint Africa; “Let’s say a business wants to send money to another business, they do their business and what we do is just ask, ‘Which user are we tagging the transaction to? What’s the context of this transaction? What’s the amount of this transaction? So we just give context to data from the daily operation of businesses.’”
The startup works with any business that uses a wallet. Once Thepeer API is integrated, users can fund their wallets from any app without going through banks.
However, Thepeer operates in a regulatory grey area, because despite the founders saying they spent the first few months after launch acquiring licenses, compliance is one of the reasons the company is shutting down.
“Compliance issues hindered us from launching key wallet providers or maintaining their services,” the founders wrote.
These compliance issues were the reason it partnered with Flutterwave in 2021.
The founders also said, “the overall acceptance of wallets as a viable payment option didn’t grow as rapidly as we had hoped, this meant we had to spend a lot of time and resources educating people about what we do.”
And after weighing its options, the startup decided to return investor funds and close the company.
