Cowrywise, a beloved Nigerian fintech startup that’s supported by Y Combinator, recently decided to let go of five individuals from its marketing, engineering, and customer success teams. These teams focus on promoting the app, building its technology, and ensuring customer satisfaction.
According to someone familiar with Cowrywise’s business, the company mentioned that the jobs were ended because they didn’t match the company’s new direction. The layoffs happened due to changes happening within the company and the evolving requirements of the business.
Cowrywise, a company with a team of 50 employees, has verified that five positions were terminated as part of its yearly performance assessment. They emphasized that these changes were specific to individual performance reviews and stressed that there were no widespread job cuts or layoffs across the company.
The company clarified in an email to TechCabal that the recent layoffs were not a result of economic or business performance issues, which are typically the reasons for job cuts.
Someone familiar with the company shared insights, envisioning a transformation for Cowrywise in the upcoming years. According to this individual, who preferred to remain anonymous, the company’s future identity is expected to shift towards being more of a finance company rather than just a fintech company. They chose not to disclose their identity as they were not authorized to speak on the matter.
Employees impacted received a payout equivalent to three month’s salary, which goes beyond the usual one month stipulated in their contracts for those let go due to performance issues. This departure from the norm in exit packages is quite uncommon.
Cowrywise was started in 2017 by Edward Popoola and Razaq Ahmed. They began with a savings feature and have since expanded to offer various investment options to people in Nigeria. According to TechCrunch, the company, which is part of Y Combinator’s Summer 2018 batch, now has more than 220,000 users. In January 2021, Cowrywise secured $3 million in pre-Series A funding, with Quona Capital leading the investment.
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In 2021, it got permission to work as a fund manager from Nigeria’s capital markets regulator, the Securities and Exchange Commission (SEC). The company’s website says it offers 19 different mutual funds licensed by the SEC. On their platform, you can pick from these funds, and they proudly list at least 20% of all mutual funds available in the country.
Cowrywise’s decision to let go of some employees comes at a time when the tech industry in Nigeria is facing economic uncertainty. Many other tech companies have also taken similar steps in the past few months, showing the difficulties startups are experiencing in the current economic conditions in the country. Operating a startup in this environment has proven to be challenging for several businesses.
