The post-COVID era in 2021 was an exciting one for the African tech ecosystem, it was the year of unicorns—five startups got to the billion-dollar valuation mark. So far this year, no unicorn has been minted based on disclosed reports.
Per BD Funding Tracker, the continent's ecosystem has raised ~$3.5 billion at the time of this report.
Scandals rocked the booming African tech ecosystem in 2023.
From the year of unicorns, the ecosystem jumped into the season of scandals. Earlier in March, I predicted that although most of the reporting on the continent is focused on solutions, the coverage will take an investigative approach to probe activities on the continent, as their colleagues have done in Silicon Valley.
Shortly after this prediction, the muckraking began. As we wrap up the year, I curated some of the most notable scandals that took place in the African tech ecosystem in 2022.
The chaotic culture of Bento Africa
In March 2022, TechCabal published an expose on Bento Africa (formerly known as Verifi.ng), the report exposed the alleged toxic behaviour of Ebunoluwa Okunbanjo, the company's CEO, after a series of interviews with former and current employees.
Some of the behaviours include alleged verbal abuse, which included unconscionable curse words, refusal to grant leave and time off, and erratic termination of appointments without due process—essentially just deactivating their emails and Slack accounts.
Okunbanjo was also accused of allegedly telling laid-off employees that they would not find work anywhere. Leave days and time off were dismissed as a fallacy, according to the report.
Following the report which led the conversation on social media about #ToxicBosses, Bento Africa's Board of Directors dismissed the company's CEO from people-related decisions.
Flutterwave: A unicorn and her scandals
Shortly after the calm was coming after Bento's storm, Clara Wanjiku Odero, a Nairobi-based former executive at the Nigerian fintech unicorn, Flutterwave published an article on April 4, 2022, where she alleged that she had been bullied and harassed by the company's current CEO, Olugbenga “GB” Agboola.
Eight days after Odero's allegations, David Hundeyin, a Nigerian journalist, also published an investigation that accused Agboola of insider trading, the report revealed that the CEO created a phantom "co-founder" identity to give himself more shares in the early days of the fintech company. Hundeyin's report claimed that he offered share prices below the company's valuation to employees who wanted to cash in on their vested options—these stock sales went into an investment firm run by Agboola, according to the report.
However, in an email to employees on April 20, reported by TechCrunch, GB denied the allegations of impropriety and self-dealing.
Later in May 2022, an online gambling company, 86fb/86z alleged that "[Flutterwave] maliciously froze our funds and intends to take the funds as their own and extort us by cooperating with the local police". Flutterwave denied the allegations stating that "some merchants were passing transactions on behalf of 86FB/86Z…without approval or authorisation."
Yet another scandal for Flutterwave. Kenya’s Assets Recovery Agency (ARA) froze dozens of bank accounts linked to Flutterwave, alleging that they are "conduits of international money laundering". Flutterwave denied the allegations, stating that it was a target of a "disinformation campaign". In fact, Agboola told Peoples Gazette that the bank order is politically motivated.
Related Article: ARA drops fraud charges against Nigerian fintechs, Kora and Kandon
Capiter's founders and board at a tug of war
In September 2022, the board of directors at Egyptian B2B e-commerce company, Capiter expelled the company's co-founders—Mahmoud Nouh and Ahmed Nouh—from their roles as CEO and COO. Although the reasons were unclear, local media reported that the expulsion was due to the duo's "inability to fulfil duties".
In a now-deleted Linkedin post, the co-founders described the allegations as "false and untrue". At the time, 50% of August's salaries were yet to be paid and at least 100 employees were laid off between August and September.
Another African startup, Kloud Commerce came under the media's scrutiny after investors at the startup petitioned Nigeria’s Economic and Financial Crimes Commission to investigate founder and CEO, Olumide Olusanya for fraud and misappropriation of funds.
Per an investigation published WeeTracker in October, the plaintiffs also accused Olusanya of mismanaging company funds and fraud. Aside from a bloated payroll of employees working on non-existent or non-performing products, investors also claim Olusanya diverted funds from the company for personal use. Olusanya reportedly withdrew ₦4 million ($9,000) as an "entertainment allowance" between August and September 2021, as well as ₦22 million ($50,000) for publicity events in Ghana where he spent $100/night in hotels.
A $15,000 angel investment allegedly also went into the founder’s accounts.
However, Kloud Commerce's Board of Directors denied the allegations of financial impropriety levelled against the company’s CEO are unfounded rumours peddled by a SAFE investor.
"Telling these stories is actually important in how we grow our ecosystem into self-sustainability. In the long term that's all that matters. What we have now is hyperbole to an extreme. Hot emerging market money poured into Nigeria with zero checks & balances. There is so much wrongdoing happening right now across Nigeria," Jason Njoku, Founder and CEO, Iroko TV, tweeted in April 2022.
Risevest's CEO stepped down
In August 2022, Eke Urum, Risevest's CEO stepped down indefinitely to enable an independent investigation panel set up by Risevest's investors to look into the allegations of sexual and non-sexual misconduct levelled against him.
Following the 6-week investigation, Eke was found guilty of the allegations, according to the board—Eke protested these findings. Although the company's Head of Operations, Tony Odiba was appointed as interim CEO, Eke is still involved in the day-to-day affairs of the company.
The woes of Healthlane
Most recently, Healthlane's co-founder and CEO, Alain Nteff was accused of unbridled spending and erratic decisions. The healthtech startup participated in the Y Combinator’s winter batch in 2020 raising $2.4 million from Silicon Valley’s top investors including Sequoia Capital and Silicon Valley Bank.
According to a report by TechCabal: Healthlane’' financial troubles became evident in December 2021 when the company started owing vendors and didn’t pay employees their salaries on time.
Within this period, some employees at the company were reportedly fired by Nteff. Since this publication, the company has not responded to the allegations levelled against it by over 10 past employees.