Zazuu Shuts Down After Failing to Raise Additional Funding
Zazuu, an Africa-focused fintech startup specializing in cross-border remittances, recently announced that it was forced to shut down due to its inability to secure extra funding. This decision comes just over a year after the company raised $2 Million from investors, including Launch Africa, Founders Factory, and rapper Tinie Tempah.
In a recent LinkedIn post, Zazuu stated that regardless of the progress it had made in the industry, the tough funding climate made it impossible continuation operations. The company had worked hard to make cross-border money transfers fair, securing regulatory approvals, building products, and preparing for future growth. Nonetheless, the inability to secure growth funding led to the difficult decision to shut down.
African Fintechs Struggle with Funding
According to a report from Techcabal, Zazuu is not the only fintech startup to face closure due to funding challenges. Other corporations such as Lazerpay, Paystack, and Vibra have likewise shut down or scaled back operations due to similar struggles.
Silicon Valley Bank’s Impact on African Fintechs
Following Zazuu’s notice, entrepreneur Ogar Phil Blaize suggested that the startup’s closure could be linked to the collapse of Silicon Valley Bank, which was known for supporting tech enterprises universally. Blaize implied that there is as of now no bank focused on supporting African fintechs, leading to a cycle of closures due to funding challenges in the region.
Hot Take: African Fintechs Face Funding Challenges
It’s clear that African fintech startups are facing whole lot of challenges in the case of securing the funding necessary for their operations. The closure of Zazuu is just one example of this trend, and without favorable funding opportunities, more startups in the region may struggle to survive.
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