Nigerian Fintech Cova Shutdown Operations Due to Several Factors
Cova, a Nigerian fintech startup will reportedly shutdown operations on February 10, 2024.
According to an email sent to users on Tuesday, January 23, the startup founders Olu’yomi Ojo and Yomi Osamiluyi, said the startup will be shutting down due to what they termed as “several factors”.
According to the co-founders, the closure of the company was a difficult choice that weighed heavily on them, as they expressed in their communication with users. The announcement came with a promise of subscription refunds, signaling a responsible exit.
Founded in 2021, Cova was established with the aim of providing a single source of truth for users’ assets. Users could link their Cova profile to their local and international bank accounts, savings apps, investment platforms, and crypto-wallets, and even track their landed properties.
The company concentrated on offering lending, investment, and savings solutions to its clientele through digital financial services.
Although Cova provided an essential solution, two years into operation, the co-founders realized that the product was not gaining traction. This lack of traction, despite the unique solution the startup offered, was a red flag that could not be ignored.
The challenges faced by Cova were multifaceted, from the need for deeper integration as demanded by users with assets across different countries to the foundational issue of trust in a new service.
In an undated email to investors, the company’s Co-fonder Ojo explained that the company was carefully evaluating its financial situation and concluded that it was better to act in the interest of Cova’s investors and stakeholders than to continue spending funds without a clear path to profitability or decent revenue.
Despite having enough funds to operate for another year, the co-founders opted for a shutdown. This choice reflects a commitment to acting in the best interest of investors and stakeholders rather than depleting resources without a clear path to profitability or substantial revenue.
The Cova shutdown serves as a reminder of the volatile and challenging nature of the startup ecosystem. Despite the best efforts of its founders and the unique value proposition, Cova could not overcome the barriers to growth and user adoption.
