Chopnownow, 5 Other Nigerian Startups Shut Down Over Financial, Other Challenges

• Six of the eleven African businesses that shut down, went into hibernation in 2024 were based in Nigeria
• The development illustrates the persistent difficulties in the nation's innovation economy experienced by businesses
• In addition to financial difficulties, Nigerian businesses also encounter many legislative and structural obstacles

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Nigeria was home to six of the eleven African firms that closed, went into hibernation, or went into administration in 2024, a recent Startup Graveyard study has shown.

This development underscores the ongoing difficulties in the nation's innovation sector.

Although the primary reason for company closures in Africa in 2024 was still a lack of finance, a recent trend revealed that firms that ventured into new services were unable to attain product-market fit.

A return to their primary services was prompted by companies such as JumiaFood and BuyCoins Pro discontinuing their recently announced offerings due to a lackluster reaction from the market.

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This year, a number of Nigerian startups have shut down, including ThePeer, HerRyde, Chopnownow, Cova, BuyCoins Pro, and Quizac; other African startups that have shut down include GroIntelligence, CopiaGlobal, RejaReja, and iProcure, all based in Kenya; and LetsChat, which had operations in several countries. In addition to financial difficulties, Nigerian startups are still facing widespread structural and regulatory obstacles.

Fintechs are particularly affected by recent government initiatives such as the Electronic Money Transfer Levy (EMTL) and cybersecurity levies, according to the research, which also highlighted erratic rules and an unstable power supply as major challenges.

Some businesses have been forced to change their business strategies in order to survive due to the regulatory environment; this might discourage foreign investors and impede expansion.

Only nine of the more than 1,200 unicorns worldwide are African, according to Crunchbase statistics that was used in the article. Many firms are having difficulty scaling due to a lack of funding and a VC environment that is concentrated in a small number of locations, specifically Nigeria, Kenya, South Africa, and Egypt.

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The report emphasized that in order to obtain long-term finance and stability, companies must demonstrate their profitability, even though investors are encouraged to gain a deeper understanding of the subtleties of African markets.

Earlier, Legit.ng reported that Nigerian fintech startup Thepeer is shutting its operations nearly two years after raising $2.1 million in a Seed round.

In a statement on its website, the founders cited compliance issues that hindered it from launching key wallet providers.

Chike Ononye (CEO) and Michael Okoh (CTO) also blamed the slow acceptance of wallets as a viable payment option, hence, causing the diversifying resources into enlightenment.

Nigerian fintech Zazuu shuts down after raising $2m

Legit.ng reported that Zazuu, a fintech company focusing on Africa, has officially ceased its operations due to the inability to secure additional funding.

The closure announcement was made through a LinkedIn post where the startup acknowledged the challenge of obtaining sufficient growth funding as the primary reason for the shutdown.

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Established in 2018 by four Nigerian entrepreneurs—Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO)—Zazuu aimed to revolutionize the remittance payment landscape in Sub-Saharan Africa.

Source: Legit.ng