ACR #12: Young crypto startup forced to sell 🙁

Feb 20, 2023

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In the past week, Fluidcoins, a 2-year-old crypto startup in Nigeria, sold for an undisclosed amount. It was acquired by a cryptocurrency trading exchange, owned by a popular Nigerian crypto investor based in the UAE.

Confirming the acquisition, Blockfinex’s CEO, Danny Oyekan said on his Linkedin page:

“Last month, we completed a deal to acquire Fluidcoins a Nigerian Payment Gateway and Wallet-as-a-Service startup. We intend to provide these services to Digital Banks and Payments services around the world. Providing them access to use Blockfinex’s liquidity to offer over 600 cryptocurrencies available on Blockfinex and 2000+ trading pairs…”

What does this mean?

According to the statement from Fluidcoins, it had to sell as it couldn’t raise new funds and had a significant hole in its balance sheet. It could either shut down or sell.

"We have a balance sheet deficit on Flip for ~$30K…[we are] unable to raise extra cash hence requiring us to either shut down or make a fire sale—went with this option. Shutting down wouldn’t cover item 2," according to the company’s statement from benjamindada.com.

The best guess is that the shortfall comes from funds lost to the FTX collapse, as the “up to 15% APY” offering was similar to the offer on the FTX yield program.

This writer has watched Fluidcoins’ growth and several product releases over the past 2 years. Founded by Lanre Adelowo, a software engineer that worked at Localise before going on to kickstart his own blockchain API startup at the peak of the crypto boom in 2021.

It started with a mission to enable businesses to accept crypto payments - something like Flutterwave or Paystack for crypto.

Less than a year later, it launched several other products like liquidity-as-a-service, wallet-as-a-service, stablecoin earn with up to 15% APY, Fluidshop (platform for merchants to create digital stores) and crypto virtual card, just to name a few. Wheew!

That’s a lot if you ask me. It’s like trying to build and grow five standalone businesses at once. However, just 5 months ago it seemed to be gaining some traction and going well.

The founder posted on LinkedIn to celebrate the first 6 weeks of launching the Flip app, which allowed users to save and earn crypto, pay bills and get a USD virtual card, and acquiring about 19k users on it. It was said to have processed over $1 million in total transaction volume and made about $100k in online card payments.

But the crypto lending collapse in the past few months have put many centralised crypto yields and earn product out of business, and Fluidcoins seems to have been one of those.

Recall that African crypto startups have been experiencing a hard time since the second half of 2022 and we predicted more layoffs and forced shutdowns in 2023.

The good news for the ecosystem is that Fluidcoins was able to find a buyer quickly rather than shutting down with the possibility of users losing their funds which could have been worse.

What else?

Rwanda Government Orders Banks to Stop Facilitating Crypto-related transactions

According to the National Bank of Rwanda, the country’s regulated financial services providers are now prohibited from facilitating crypto-related transactions.

Be Mobile Africa launches crypto trading platform

Neobank Be Mobile Africa has announced the launch of a crypto trading platform which will enable individuals in South Africa to buy and trade cryptocurrencies using South African rands (ZAR).

Rwanda Investigation Bureau Detains BITSEC Crypto Scammer

The Rwanda Investigation Bureau (RIB) arrested and detained Aimable Nkuranga, the former boss of Association of Microfinance Institutions in Rwanda (AMIR). According to local reports, Nkuranga was arrested on allegations of fraud and theft by deception through his cryptocurrency business (BITSEC), in an RBI operation targeting multiple suspected scammers.

Product of the week

Wicrypt

Wicrypt is a decentralised mobile internet sharing and monetisation network. The Wicrypt “Share to Earn” model allows you to make a passive income when you share your hotspot with anyone around you.

With the Wicrypt device, you can allocate per data usage or per timeframe of use. You charge users at your own rate, and users only have to pay for what they use. It also has a Wicrypt Network Token ($WNT).

It has raised US$1.5 million in funding and received $150,000 earlier this year from the LEAP event in Saudi Arabia.

Personality Spotlight

Oluchi Enebeli

Oluchi Enebeli is one of the most sought blockchain engineers on the African continent. She started as a software engineer/web developer in 2016. But within six years, she has honed her skills to become a renowned blockchain engineer.

She is the founder of Web3Ladies, a female-focused community to drive women's inclusion in the African web3 space.