Moniepoint Denies Payday Acquisition

Moniepoint, a Nigerian business bank, and PayDay, a neobank, have denied reports of a planned acquisition

An executive at Nigerian fintech startup, Moniepoint, has denied reports linking it with the potential acquisition of Payday, a startup which it recently led its seed round. According to the executive, Moniepoint’s investment in Payday was “a strategic investment and not an acquisition.”

This comes a day after Payday announced the close of its $3 million seed round. Weetracker reports that both startups have agreed on terms for a cash plus equity deal under $40 million, and employees of Payday would also be offered Moniepoint stock to stay on the team.

Reporting the news of Payday’s seed round, TechCrunch disclosed that the startup, which launched operations in 2021, had received a $15 million acquisition from one of the continent’s unicorns. However, Favor Ori, the startup’s CEO, confirmed the offer was turned down.

Having led Payday’s seed round, CEO, Tosin Eniolorunda disclosed that Moniepoint would leverage Payday’s infrastructure to offer services to its merchants.

“There’s the alignment in our goal to provide financial happiness by addressing key international payment pain points with merchants and individuals. We see a potential to leverage their infrastructure to further deepen our suite of financial services for merchants as well, and we’re looking forward to all that’s to come,” Eniolorunda said.

Considering Moniepoint offers business banking services to its customers, this could mean its merchants could receive international payments like Payday users currently do.

Coming off the back of a partnership that saw it act as a payment partner for Starlink, Payday has gone on an aggressive marketing push that drove its user base from about 100,000 in 2022 to more than 300,000, three months into 2023. That increase in user numbers appears to have come with challenges, as users can be seen complaining about challenges using the product. That could be resolved as the startup hinted at increasing its employee count from 35 to 50.

Payday is Ori’s third attempt at building a startup after stints at WeJapa and Talent Match, both talent outsourcing startups. Before founding these startups, he sold College Situation, an edtech app, three weeks after it launched. More than 43 startups were acquired in 2022 across Africa, and this year, BioNTech acquired InstaDeep for more than $600 million.

Where acquisitions were previously hard to find in Africa, the difficulty accessing funding in 2022 may mean many startups would be left with limited options to stay alive.

April 01, 2023