Nigerian cryptocurrency exchange platform Bitmama is engaged in discussions to acquire fintech startup, Payday, in a deal reported to be valued at around $1 million. According to sources close to the matter, the acquisition is approximately 85% finalized if terms are agreed upon.
Payday made waves in Nigeria’s bustling fintech scene after securing $3 million in seed funding in 2022 to power its neobanking services. However, the company has recently faced growing pains – grappling with issues like chargeback fraud, third-party dependence, and key executive departures.
Meanwhile, Bitmama has pivoted beyond purely cryptocurrency trading into broader global financial services via its Cross-Border payments product Changera. Acquiring Payday’s 300,000+ customer base would significantly accelerate user acquisition for Changera while resolving Payday’s stability challenges through integration.
Conversations around Bitmama purchasing Payday started just weeks ago, initiated by Payday CEO and founder Favour Ori. Ori recognized the potential synergies between the startups and reached out to Bitmama co-founder Ruth Iselema on acquiring Payday.
Iselema noted that buying Payday would jumpstart Changera’s growth given Payday’s already substantial user base instead of needing to organically build from zero. Under its umbrella, Bitmama could overcome Payday’s former issues related to reliance on third-party partnerships.
If finalized, the deal would be an all-stock offer, providing Payday investors an equity share in Bitmama worth around $1 million. Numerous key Payday staff would also transition teams, although founder Ori’s future role remains unconfirmed.
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In the short term, Payday customers would likely experience no changes to services or fees. And in the long term, they may gain from an expanded suite leveraging Bitmama’s blockchain infrastructure.
For Bitmama, bringing Payday under its control allows aggressively pursuing a ambitious product roadmap for its Changera cross-border payments play. Particularly, the company looks to debut a business-focused solution facilitating smoother B2B transactions across borders by early 2024.