Exclusive: Troubled Ghanaian fintech, Dash set to lay off 50% of its staff
Seven months after Dash CEO was suspended to enable a financial audit, the Ghanaian fintech plans to downsize its workforce by 50% due to its inability to raise additional funding.
Following a company-wide town hall meeting held on the afternoon of Tuesday 2nd October 2023 (West African Time), Dash—the embattled Ghanaian fintech- revealed to its staff that the company will be reducing the size of their workforce by about 50%, according to a source familiar with the matter.
Two months ago, Weetracker reported that investors "are actively seeking to dispose of Dash's assets". Our sources reveal that conversations indeed took place between a later-stage Nigerian fintech and an international IMTO but a deal failed to emerge. Thus, necessitating the need for Dash to cut back its staff strength to preserve what's left of its runway.
Bendada.com reached out to the interim CEO, Kenneth Kinyua and the people operations team for comment, but received none as of the time of publication.
On March 7, 2022, the then three-year-old but little-known Dash announced itself with a $32.8 million seed round to fix the fragmentation between mobile money and banking networks, per TechCrunch's report. The founder and former CEO, Prince Boakye Boampong's pedigree as a repeat African founder who had made YC contributed to the startup's ability to raise the "oversubscribed" seed round which valued the company at over $200 million.
Ghana's Dash was Insight Partner's first lead investment in Africa. Other notable investors in their seed round include Global Founders Capital, 4DX Ventures, and ASK Capital.
Dash's tumultuous journey started right after its landmark fundraise announcement. The Bank of Ghana (BoG) was the first to make a hampering move. On March 15, 2022, BoG ordered the suspension of Spektra Technologies (dba Dash) in the country, for offering services—wallet creation, cross-border payment, and utility payment—without regulatory approval. "Payment Service Providers are required to obtain the appropriate regulatory approval from the Bank of Ghana under Section 7 (1) of the Payment Systems and Services Act, 2019, (Act 987) prior to operating a payment service in Ghana,” said Kwame A. Oppong, the BoG's Head of Fintech and Innovation in a letter announcing Dash's suspension.
While the startup stopped offering its services in Ghana, it operated in other African markets—Nigeria and Kenya.
In July 2022, it was also a victim of the Union54 debacle that beleaguered the ecosystem. There were cases of fintech customers trying to pay with underfunded virtual USD cards or glitches that overfunded customers' wallets. Union54 claims to have stopped $1.2 billion in chargeback fraud. However, when a customer is over-credited from a card funding transaction, the fintech company has to recoup the money or pay for it in some way. Our source says Dash claimed to have "lost over $1.8 million" in this time. It's hard to ascertain the exact amount attributable to the Union54 debacle, as the company has a record of concealing "financials within the firm", per a TechCrunch report in February 2023.
That TechCrunch report accused Dash of three major things. One is an unfavourable work environment "where employees resigned and were laid off at will". Two is the founder selling "millions of dollars’ worth of his shares in a secondary sale". The third is that of overall financial impropriety which could indicate a misappropriation of assets and misrepresentation of facts. As a result, Boampong was placed on an "indefinite administrative leave" to make way for a comprehensive financial audit.
While the findings of this audit were not officially disclosed to the public, WeeTracker reported that the investigation “revealed the numbers and transaction volumes that once touted the company's meteoric rise were elaborate fabrications intended to mislead investors”. For context, according to WeeTracker, Boampong told investors 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." This "meant Dash had quadrupled its transaction volume and quintupled its user count within five months."
Dash's board named Kenneth Kinyua, who was previously the Head of Business Development, East Africa as interim CEO. Kinyua was formerly the CEO of Kopo Kopo, a Kenyan financial services company, before joining Dash.
This is a developing story and we will provide more updates when we get them.
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