A year and a half after its incorporation, Lazerpay ceased operations. Here’s the story of how the lauded startup was unable to secure funding and its eventual shutdown. Written by Ngozi Chukwu and Muktar Oladunmade.
Two months after sponsoring Blocathon, a hackathon for Web3 designers, crypto payment platform Lazerpay shared that it was shutting down its business. It was bittersweet, considering the fact that a blockchain hackathon is also where the company’s founder, Njoku Emmanuel, reportedly built his first smart contract. He would eventually get to the final stage of the hackathon, and he credits his success to a lot of Udemy courses and hours of coding practice during the pandemic. By 2020, the decentralisation bug had bitten Njoku and in 2021, he launched Lazerpay.
The ideation of Lazerpay
In 2021, crypto was having a high-water moment in Africa. Every conversation was about decentralisation, the blockchain, and the big changes crypto would make. While crypto-optimism elsewhere was driven by a distrust of banks and the idea that the current monetary system is obsolete, the premise in Africa was simple. For Africans, crypto was a way to make and preserve wealth and a way to simplify payments. On a continent where international payments can be complex, it was a compelling promise.
It explains why Njoku said he rejected a $300,000 job offer at Avarta. Instead, he, Abdulfatai Suleiman, and his cousin Prosper Ubi founded Lazerpay in October 2021. The newly formed company provided APIs that let platforms integrate and collect crypto payments. It also provided links that anyone could use to collect payments directly into their wallets or banks. This was a sensible play, with crypto-acceptance on the rise. Investors were also falling over themselves to fund African blockchain startups. Every blockchain engineer with gumption was partnering with trusted and skilled friends or work colleagues to solve Africa’s payments problem. The thinking was that taking away the banks and issuing partners as middlemen could be profitable businesses. In the end, the marketing spiel was simple: Lazerpay was gunning to be the Stripe for crypto.
“We only deal in [stablecoins] BUSD, DAI, USDC, and USDT. We focus on only these because they are backed by the US dollar, and it is important for us to provide a stable, secure, and relatively risk-free financial solution for our users,” Njoku told Disrupt Africa in an interview. This quote doesn’t tell the whole story of how audacious the idea for Lazerpay was.
According to Ohalewe Richmond, the designer who came up with Lazerpay’s first logo, “I thought the idea was crazy. We know Paystack and Flutterwave, but the idea of getting businesses to process payments in crypto seemed crazy to me, and I think that was the general vibe about crypto payment in Nigeria then.”
The early days
In several interviews, Njoku stated that he and his CTO, Abdulfatai Suleiman, often worked overnight to build Lazerpay’s infrastructure. “We had our toothbrushes in the office, and only went home if we needed a bath,” he said in a Founders Connect interview.
Richmond Ohalewe, the designer, says it took him three weeks to develop the initial Lazerpay logo—an infinity sign that took the shape of an L. “If you look at the logo, you can see a bridge. Lazerpay wanted to connect people by giving them and their businesses fast crypto payments anywhere in the world,” he explained. “At the time, they were looking to raise money to get started, and I was there to help them produce a compelling brand identity,” Ohalewe added.
The company stuck with Ohalewe’s vision and went on to announce an angel round of $100,000 in November 2021 after incorporating it in October. The round came from investors like Paystack’s CEO, Shola Akinlade, Xend Finance’s CEO, Ugochukwu Aronu, and several other angel investors.
Four months later, the company redesigned the logo to a solid blue image that sits like the quadrant of a pie but with rectangles shooting out from the sturdy L- shaped base, like lasers. However, it became apparent that the most prominent identity of the brand was in fact the young founder, Njoku.
An instant darling
Nearly every major piece of publicity that the company mentioned centered on how incredible it was that a 19-year-old was running his own tech startup and getting investors to put their money behind it. It was a captivating story. Njoku started learning to code at 15, dropped out of the university to take a tech internship, landed a $3000 per-week job, and eventually rejected a $300,000 job offer from Avarta.
According to Joyce Imiegha, a producer of Founders Connect, a show that Njoku appeared on and that spotlights African founders, “He was 19 but didn’t talk or act like a teenager. He was confident, very assertive, and obviously intelligent. He articulated his thoughts and opinions about the problems that he was solving so well.” Joyce later went on to do some PR work for Lazerpay.
At the time of the Founder’s Connect interview in the first quarter of 2022, the startup had grown to a team of 15 people. Popular opinion about his leadership was that he was empathetic, considerate, and inspiring. A former employee told TechCabal, “We had a flat organisational structure so he was a very accessible leader. You could go into his DMs to recommend ideas or make complaints.” However, some employees maintain that he was rather too friendly and sometimes allowed his personal relationship with his workers to interfere with the hierarchy at work. “There was a clique at work. While cliques are not uncommon, this was uncomfortable because our CEO was in it. It was as though more people had access to him than others,” the source told TechCabal.
Another emphasized, however, that “Even though he has expressed that next time he would not sacrifice performance for the sake of relationships, I thought he was very professional. He took action against apparently bad behaviour and rewarded exceptional attitude and work.”
Life at Lazerpay
While the company still operated, the social media posts of the team members show that they were excited about their work at the company. Even some who left before the shutdown look back fondly on their time there, as their work at the company opened doors to bigger and better-paying jobs in other startups. “It was the first time I worked at a web3 startup, and it really set me up for the success I have experienced since,” an ex-employee told TechCabal.
“My friends were not forthcoming about how much they earned, but I know they were one of the best-paying startups then [in Nigeria],” Ohalewa said on a call with TechCabal. An anonymous source told TechCabal that some members of the engineering team were earning as much as $1,500, a lot of money in Nigeria, where all, if not most, of its employees lived. A non-technical staff said he was earning about N300,000 before he left the startup. Even though the CEO, Njoku, was reportedly personally in charge of remuneration, several sources told TechCabal that he did not take a salary. “He made a lot of money before working at Lazerpay, and that kept him going,” an anonymous source said to TechCabal in an interview.
Improving the product
While the team grew in combined experience and number, the product did too. It underwent some evolution to provide more value to its targeted users—businesses and organisations. In February 2022, they announced a donation link feature for NGOs, which the popular Nigerian NGO ChessinSlums used in a campaign to raise $1 million. The fundraising got international attention, attracting donations from celebrities like Paris Hilton. Beyond facilitating fundraising with its new donation feature, Lazerpay also promised to match every dollar donated using the feature.
In the weeks that followed, the company partnered with and integrated its crypto payment infrastructure on betting platform BetDemand, fintech startups PayDay, Direcharge, and Risevest, and health-tech startup NguvuHealth. In addition to announcing these partnerships, it also invited more businesses to use its payment link or integrate its LazerPay button into their apps or websites. The startup often offered giveaways of up to $100 to incentivize users to join its Telegram community or use its technology.
In March, six months after the business was founded, it announced that over 800 businesses had been onboarded on its platform. They had also reportedly processed over $100,000 in transactions. Before the end of 2022, LazerPay had evolved from enabling payment in stablecoins to allowing users to swap stablecoins and receive payment in fiat (currencies of countries such as Nigeria, Kenya, Rwanda, Ghana, the US, and the UAE). The team also included a feature that allowed vendors to display pictures of their goods to buyers. It also enabled the integration into global e-commerce stores like Shopify and WooCommerce. The startup called this version of itself Lazerpay V2.0.
“Getting businesses to use the platform was challenging at first,” Barakat Olatinwo, growth lead at Lazerpay, said on a call. She attributed it to the relative unfamiliarity of the technology but added that “we usually get positive responses when we explain how it works.”
Finding product-market fit
Sources close to the startup note that Lazerpay was not able to achieve product-market fit (PMF), and while some blame the marketing strategies of the startup, others say it was just a matter of timing. “It is one thing to facilitate crypto payment for individuals, and it is another to do the same for businesses. It is novel, hard, and expensive to do because of the level of education about crypto in the country,” a source told TechCabal.
A source who blames the marketing strategy said, ”It was just weird to see a B2B crypto startup doing most of its marketing on Twitter instead of Instagram or LinkedIn, where most businesses are.” TechCabal asked the growth lead, Barakat, if she would do anything differently if they had the chance again. She said she wouldn’t and that she remains optimistic about the potential of B2B crypto payments.
A source told TechCabal, however, that they wish Lazerpay had pivoted earlier. “I wish that they were more agile and made necessary changes to product features when they saw that things were not going as planned. It is expensive to be the one breaking ground in a market. But some founders have successfully stuck it out with a novel product and made it work, so it is understandable that they kept trying to make it work,” they added.
The sunset of a crypto darling
In November, Nestcoin, one of the investors in Lazerpay, shared that it had lost significant operating capital when FTX, the exchange it held monies, crashed. Nestcoin laid off staff last year, and its CEO stopped taking a salary. This began the public struggles of crypto startups in Africa.
In the same month, after stopping the salaries of the management team and slashing the salaries of other employees, Lazerpay also began layoffs. The founders had reportedly tried to keep the startup afloat with their own savings, but that was not enough.
On Twitter, Njoku shared a letter announcing that the lead investor in its seed round had pulled out due to “market conditions and disagreement on terms”. A source close to the matter told TechCabal that the layoffs happened after the founder rejected an unfavourable acquisition offer from an existing investor. According to the source, the founders and one more employee remained working at the startup with no pay until the shutdown.
Read also: Lazerpay shuts down
A disagreement on terms
Considering the good faith Njoku seems to have enjoyed in the ecosystem, one cannot help but wonder why said investor pulled out or why another or others did not step up to keep the apparently promising startup afloat.
An anonymous source close to the matter tried to explain why. “[In Lazerpay’s first funding round] Nestcoin and 4DX Ventures invested.” They added that “in three months, Lazerpay returned to the market looking to raise money at a $15 million valuation”. They also shared that at that point, Lazerpay had yet to gain the type of adoption that would make it worth a $15 million valuation. “Not a lot of people were really using it; the payment volume was super low at $80,000”.
According to the source, Lazerpay’s fundraising process fell apart because the startup refused to budge on its valuation. “They got the interest of TransferTo, the parent company of B2B fintech startup Thunes, but somewhere along the line, TransferTo grew uncomfortable with the valuation and wanted to revise the terms. Lazerpay resisted.” TechCabal was not able to independently verify these claims.
“Unfortunately, that period coincided with the period when crypto enthusiasm fell because of FTX”, they added.
Read also: Crypto’s quick-money promise for Africa is collapsing
The founder took to social media to announce the shutdown, and the news was welcomed with unanimous sympathy and applause for Njoku, people, in many words, called him daring and inspirational for attempting to build in such tough economic conditions.
The news was also accompanied by an announcement that the startup’s IP was up for sale. It has not been confirmed if anyone has bought it yet. Njoku was not able to provide any comment on the events and opinions reported in this story as he is still processing the shutdown of his startup.
Editor’s note: This article was corrected to show that Joyce Imiegha is a producer of Founders Connect and not an associate producer, as earlier stated. It has also been edited to omit a quote about the valuation of Lazerpay following new information.