BitMama, a prominent Nigerian crypto exchange startup led by CEO Ruth Iselema, is reportedly in the final stages of negotiations to acquire Payday, a fintech company previously backed by Moniepoint. This move comes three months after exclusive reports from TechCabal hinted at potential buyer discussions.
In this proposed deal, BitMama, now focusing on global services beyond crypto exchange, including remittance, has offered PayDay investors a compelling $1 million worth of equity, valuing the crypto company at $30 million.
CEO Ruth Iselema pointed out the strategic alignment of products, accentuating the synergy between BitMama’s expanding services with the remittance service, Changera and Payday’s product.
For BitMama, this acquisition represents a leap forward, sparing them the need to build Changera from scratch and avoiding the complexities of developing new software stacks or acquiring fresh user bases. Favour Ori, CEO and founder of Payday, expressed optimism about the potential deal, anticipating a strengthened team and heightened operational efficiency if the acquisition materializes.
The proposed agreement involves BitMama taking over Payday’s customer deposits and liabilities, which marks a pivotal moment for both entities — which in the case of PayDay, offers a resolution for investors and users who have endured a long period of agony. However, both BitMama and Payday maintain a cautious stance and refrain from making official comments while the acquisition talks are still ongoing.
Payday has faced challenges in recent months, with local fintech media reporting in September that the fintech startup actively sought buyers six months after securing a $3 million seed round led by Moniepoint. The openness to acquisition predates Payday’s seed round, where a potential deal with Moniepoint did not materialize, reportedly due to reservations from Moniepoint’s board.
Despite ongoing talks to sell the company, Payday encountered negative publicity, particularly regarding customer account access suspension and salary reductions for Nigerian staff. The company cited the necessity of adjusting wages to align with local standards, prompting disgruntlement among employees who claimed promised stock options had not materialized.
Employee dissatisfaction heightened as CEO Favour Ori’s salary remained unaffected, while his involvement in the company dwindled although he argued to the contrary.
Reports indicate his focus shifted to other ventures, raising questions about Payday’s status as a side hustle. Co-founder Elijah Kingson’s employment with London-based fintech Revolut added to the complexity of Payday’s internal dynamics.
As BitMama navigates the complexities of acquiring Payday, all eyes will be on both parties to witness how this strategic move could reshape the fintech landscape in Nigeria and beyond. The outcome of these negotiations has the potential to usher in a new era for both companies, significantly influencing the trajectory of crypto and fintech developments in the region.
