Finance management startup Kippa has discontinued its agency banking business and will also lay off the 40 employees who support the product. Kippa may also shelve another product, Kippa Start, in the coming months.
Nigerian bookkeeping and finance startup Kippa has announced in a blog post that it will be shelving its agency banking business, KippaPay. TechCabal can exclusively report that Kippa has laid off 40 employees; reliable sources said layoff notices have been sent out and that the last day for affected employees is November 30. A spokesperson for the company confirmed the layoffs. “Those who will be staying back are directly connected to our other current and developing product lines,” Kippa said in an email to TechCabal.
Kippa raised $8.4 million in September 2022 from global investors, including Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, and others, for a push into agency banking after acquiring a super agent licence. Agency banking is a tightly contested space where incumbents with deep pockets—OPay and Moniepoint—have significant market share.
The company recruited ex-regulators and former senior executives at top fintech startups, including OPay, BharatPe, Khatabook, TeamApt, OKCredit, NIBSS, and Unified Payments, amongst others, for its uphill fight. At the peak of its business, Kippa had around 15,000 agents, yet it struggled with margins. “The macroeconomic conditions in Nigeria, especially the devaluation of the naira, ate deeply into our margins, and our customers’ businesses have suffered over the past six months,” said a Kippa spokesperson.
In his blog post announcing the discontinuation of KippaPay, Ekezie said, “Starting November 15, our KippaPay product will no longer be available for use by merchants. For now, the startup will be resolving any pending settlements and helping its merchants and partners transition off the product.”
According to the source, the company will soon shutter Kippa Start, which allows users to register their small businesses online for ₦20,000 ($26). “This would leave us with just the bookkeeping app that made [Kippa’s] users fall in love with them,” said one employee. Kippa’s bookkeeping mobile app allows small business owners to keep track of their daily income and expense transactions, issue invoices, provide receipts to their customers, and create marketing materials like business cards. It also keeps track of their debtors.
Someone familiar with Kippa’s business also told TechCabal that the company plans to scrap Kippa Start, its business registration product, in the coming months. “We had achieved most of our revenue goal for the year by Q1, so it’s not like this decision is because the company has poor revenue,” said an employee who declined to be named to speak freely. According to them, the company decided to pull off the product to save the increasing cost of running the POS product.