Nigerian fintech startup Kippa has announced its decision to discontinue its agency banking service, KippaPay, and simultaneously initiate layoffs that will affect 40 of its employees, News About Nigeria gathered.
Kippa’s agency banking business, which aimed to facilitate financial transactions and services for businesses and individuals, will cease operations starting November 15, leaving both users and employees to adapt to this significant change.
The company had acquired a super agent license and aimed to make a dent in the fiercely contested agency banking space. However, market dynamics and macroeconomic conditions in Nigeria, including the devaluation of the naira, negatively impacted Kippa’s profit margins and hampered its ability to sustain the service.
The layoffs, which have already begun with the issuance of layoff notices, will affect 40 employees, and their last working day with the company is slated for November 30. A Kippa spokesperson confirmed the layoffs, explaining, “Those who will be staying back are directly connected to our other current and developing product lines.”
Kippa, which managed to secure $8.4 million in funding from global investors in September 2022, including Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, and others, had grand plans for the agency banking sector. To bolster its position, the company recruited ex-regulators and former senior executives from top fintech startups in Nigeria.
Despite having approximately 15,000 agents at the peak of its business operations, Kippa struggled to maintain its profitability due to adverse economic conditions. A company spokesperson stated, “The macroeconomic conditions in Nigeria, especially the devaluation of the naira, ate deeply into our margins, and our customers’ businesses have suffered over the past six months.”
In a blog post announcing the discontinuation of KippaPay, Kippa’s CEO, Ekezie, stated, “Starting November 15th, our KippaPay product will no longer be available for use by merchants. In the weeks leading up to this, we will provide support for our merchants and partners helping them transition off the product and resolve any pending settlements.”
Additionally, sources close to the matter suggest that Kippa is considering shelving another product, Kippa Start, in the coming months. Kippa Start is a service that enables users to register their small businesses online for ₦20,000 ($26).
Discontinuation of KippaPay would leave Kippa with its bookkeeping mobile app, a product that has garnered positive feedback from small business owners for its ability to manage daily income and expenses, issue invoices, provide receipts to customers, and assist in creating marketing materials.
