Cowrywise, the YC-backed Nigerian fintech app that aggregates mutual funds for retail customers to invest in, has laid off five people across its marketing, engineering and customer success teams.

“The company said the terminated roles no longer aligned with the company’s direction,” one person familiar with Cowrywise’s business told TechCabal. “Internal restructuring and evolving business needs were the reason for the layoffs.” 

Cowrywise, which employs 50 people, confirmed that five roles were terminated following an annual performance review but insists there were no layoffs. 

“Lay-offs are usually due to economic/business performance reasons, and this was not the case,” the company said in an email to TechCabal. 

At least one person with direct knowledge of the business painted a picture of a company that is evolving. “Cowrywise will be a totally different company in the coming years and will be more of a finance company than a fintech company,” said the person, who asked not to be named because they were not authorised to speak on the matter. 

Affected employees were paid three months’ salaries instead of one month’s salary dictated by their contract as part of their exit packages, an unusual move for people fired for performance reasons. 

Founded in 2017 by Edward Popoola and Razaq Ahmed, Cowrywise, a member of the YC’s Summer 2018 batch, has grown from launching with a savings feature to providing several investment opportunities to users in Nigeria. Per TechCrunch, the startup has over 220,000 users and raised a $3 million pre-Series A funding round led by Quona Capital in Jan 2021. 

In 2021, it received a license to operate as a fund manager from Nigeria’s capital markets regulator, the Securities and Exchange Commission (SEC). According to its website, the company has 19 SEC-licensed mutual funds investors can choose from, and at least 20% of the total mutual funds in the country are listed on its platform. 

Cowrywise’s layoffs occur within the context of economic uncertainty within the Nigerian tech sector. Several other tech companies have undertaken similar measures in recent months, highlighting the challenges of operating a startup in the country’s current macroeconomic conditions.

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