Pivo, a YC-backed female-led Nigerian digital bank for trade, has shut down.
Unlike other African startups that shut down in 2023 solely due to the macroeconomic situation and funding crunch, Pivo is said to have closed shop due to unresolved founder conflict, according to sources familiar with the matter.
The conflict between the founders, Nkiru Amadi-Emina (CEO) and Ijeoma Akwiwu (COO), was said to have led to the company's deteriorating reputation, business relationships, culture, and team dynamics; thereby significantly affecting Pivo's chances of raising capital in the future.
As of May 2023, the company’s investors had to step in to attempt to resolve this. According to a memo from the meeting seen by Bendada.com, the founders' employment contracts and agreements were to be replaced with a new one that aimed to correct some of the issues faced.
"An operational Board of Directors should be established immediately to guide the company's leadership and safeguard the investors' investments," the memo read.
The news of their demise comes a year after the startup announced a $2 million seed round, which is rare for an African, female-founded, and female-led startup. In 2022, only 1.2% of the total value of global venture funding went to African startups. Of that number, only 13% of African startups that received funding had a female CEO, reveals data from AVCA and even fewer women-founded (7%) startups received VC funding in 2022.
Nkiru and Ijeoma bootstrapped Pivo for about six months before it became venture-backed. Last year, Pivo participated in the Y Combinator 2022 summer batch. The company was also part of the ODX accelerator programme where it secured $125,000 for a 7% equity stake.
Until the shutdown occurred, Pivo offered two products: Pivo Capital, a lending platform, and Pivo Business, a business bank.
At the time of securing a seed round last year, Pivo Capital allocated more than $3 million to SMEs, with a 98% repayment rate. Concurrently, the transaction volume on Pivo Business grew by over 400% from April to September of the same year.
Friends turned business partners
Nkiru Amadi-Emina (CEO) and Ijeoma Akwiwu (COO) founded Pivo in 2021. Six years prior (2015), Amadi-Emina and Akwiwu formed a friendship after meeting at a birthday party. Realising their shared values, the duo co-founded SourcePro, a logistics company based in Abuja. The challenges they encountered along the way motivated them to establish Pivo as a digital bank for trade in Africa.
"Starting a business with Nkiru was a no-brainer because if there’s anyone I’m trusting with decisions, it’s her. She has the foresight and the audacity to do things. I’m strategic and calculated in whatever decisions I make," said Akwiwu in a written interview released on their company blog, in the first half of 2022. "So I feel we complement each other. It was a matter of, we’ve seen and grown through too many things, and doing Pivo together was just the ideal next step."
While its precise origin remains unclear, the aforementioned conflict between the duo likely began after the company announced its seed round in November 2022.
During an interview with Bendada.com last year, Pivo's COO admitted that although she is friends with her co-founder, they still face challenges at work. "To be truthful, every day is not smooth. In the early days of Pivo, we set up rules—dos and don'ts on how we can engage each other. For instance, when there is an issue at work, it is not me versus you but us versus the issue," she said.
Why Pivo shutdown
About two years after the company launched, a conflict unfolded between the founders. While its precise origin remains unclear, it likely began after the company announced its seed round in November 2022.
From the information gathered, Amadi-Emina had been running another company while also being Pivo’s CEO. She then appointed her brother—with whom she was running the other company—as Pivo’s company secretary. Co-founder Akwiwu was not pleased with these, leading to a fallout in communication.
While we are yet to confirm the part Akwiwu played in Pivo's demise, what we know is that their feud and inability to reconcile led this promising startup down the path of destruction.
As the conflict between the two intensified, Pivo's investors intervened in May 2023, by laying down some guidelines for the company to continue to exist.
As part of the decisions reached by the investors, it was agreed that Ijeoma would resign from her role as COO and receive compensation. This entailed her signing a separation agreement formalising the conclusion of her association with the company.
To prevent the reoccurrence of a co-founder being involved in another business, a section of the investors' memo mentioned that, as part of the transition, "The founders will devote their full business efforts and time exclusively to Pivo Inc., and shall not engage in any other business activities or ventures that may compete with or interfere with Pivo Inc.’s operations or interests."
The memo ended with the investors acknowledging that the measures put in place might not be satisfactory to both co-founders.
"The investors state that these measures may only partially satisfy either co-founder. However, without them, they see neither a compelling future for Pivo nor a pathway for them to continue supporting the company or any future ventures initiated by either of you," the memo read. "Moving forward, the investors expect co-founders to treat each other respectfully and refrain from disparaging or publicly maligning one another, the company, or the investors."
Despite this earlier intervention, the decision to close down the company was reached during a recent town hall meeting with some of the investors in attendance. The startup is yet to publicly disclose how its users will be transitioned during this period.
As of the time of this report, Amadi-Emina and Akwiwu have not responded to our request for comment.
This is a developing story.