Lazerpay Closure: Was it Preventable?
In this collapse are lessons for future successes.
Last month, the Nigerian cryptocurrency and web3 company, Lazerpay, shut down its operations, about a year and a half after inception. It officially closed on April 30, 2023.
The CEO and co-founder, Emmanuel Njoku, announced the unfortunate news on Twitter. According to part of the statement posted on April 13, 2023, “Despite the team’s tireless efforts to secure the necessary funding to keep Lazerpay going, we were unable to close a successful funding round,” wrote Njoku.
The start-up was co-founded by Njoku, his cousin, Prosper Ubi, and Abdulfatai Suleiman in October 2021. The company developed an API which allowed developers to integrate crypto payments into their platforms, thus allowing merchants to accept payments in crypto.
It was on a mission to drive financial inclusion and interoperability in Africa and “welcomes offers from companies who are interested in purchasing Lazerpay’s IP, and who would like to continue building the future of crypto payments.”
In its almost two years of business, Lazerpay garnered support from a phenomenal community and was even tagged the African Stripe for crypto. Not only was it solving payments for businesses it also provided access to decentralised finance (DeFi) features such as lending and staking. Added to this mix was the youthful, 21-year-old Njoku at the helm of affairs.
Lazerpay Closure Inevitable: Venture Capital Winter is Everywhere
The nascent, crypto company was one of many struggling to survive against the venture capital winter currently being experienced globally. Lazerpay trimmed its team towards the end of 2022 and fought valiantly to secure funds to continue its operations.
There has also been a shutdown wave hitting the African crypto space and start-up ecosystem in recent times. Before Lazerpay shut its doors last month, Paxful – one of the leading p2p marketplaces for bitcoin trading among Africans – stopped operations. Then in February this year, Nigerian crypto start-up, Fluidcoins, was sold for an undisclosed amount. A statement from the company revealed that it had to sell due to its inability to raise new funds,
In this context, Lazerpay’s closure was unavoidable. It faced similar challenges as other businesses in its industry and continent of operations.
Lazerpay Closure Preventable: Marketed to the Wrong People
According to Iyin Aboyeji, Future Africa founder, in a tweet: “I also think they made a classic mistake of B2B payments companies. Wasting too much time marketing to developers and small businesses instead of focusing on professional services enabled sales to large enterprises. This is what made @theflutterwave survive.” In other words, the company marketed its products to the wrong target market.
Aboyeji was reacting to a tweet which suggested that the only reason Lazerpay closed shop was because it built products that were ahead of the market’s maturity.
He also alluded to Njoku’s age, which he believed contributed to the demise of the company; few financial institutions would be willing to commit their businesses to the care of Lazerpay. Given his experience and knowledge of operating multiple start-ups, he could be right.
But here’s the thing: Lazerpay’s run was inspiring and commendable.
And the last paragraph of Njoku’s tweet said it all: “We’re builders and will continue to do what we do best. We remain optimistic about the future of crypto adoption and are proud of everything we were able to achieve with Lazerpay.”
It sounds like Njoku will be back. . . soon.
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