Home Japanese values Wapi Pay co-founders step down after Kepple Africa pulls out after assault

Wapi Pay co-founders step down after Kepple Africa pulls out after assault

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Kepple Africa Ventures participated in Wapi Pay’s $ 2.2 million pre-seed fundraiser in August. On Tuesday, the Japanese venture capital firm announced it was severing all ties with the Kenyan fintech startup co-founded by Paul Ndichu and his twin brother, Edward.

The move followed a video posted on social media, which showed two men fighting with two women in the lobby of the Ole Sereni Hotel in Nairobi. In the viral video, the Ndichu twins allegedly assaulted two sisters.

“In light of the alleged assault on women by the founders of our holding company, Wapi Pay, we hereby announce that we have zero tolerance for such conduct and will waive all rights to our stake in Wapi Pay, ”Takahiro Kanzaki, founder of Kepple Group and general partner of Kepple Africa Ventures, said in a Tweeter.

While other investors in Wapi Pay, including EchoVC, MSA Capital, Future Hub, Gobi Ventures and Transsion Holding, have remained silent on the issue, Kepple has chosen to take a stand against an act so important in Africa that the United Nations l ‘described. like the continent’s “shadow pandemic”.

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Satoshi Shinada, a general partner of Kepple, said TechCabal he felt that it was the responsibility of the company to “explicitly state its values ​​publicly as soon as possible”. However, he declined to disclose any information on how the company would reverse its investment in the startup.

“We have to be a responsible investor. Whatever the truth of the alleged event, what is clear to us is that we cannot accept any violence, ”Shinada said.

But could Morals’ decision on the money lead to legal action against Kepple? A lawyer specializing in negotiation in the tech industry explained to TechCabal that any potential legal issue that arises will depend on the guarantees provided by Wapi Pay in the financing agreement or the terms sheet.

“Investors may not be held responsible if they have such conditions on their condition sheet,” the attorney said. “Otherwise, Wapi Pay could have a legitimate breach of contract claim. And the facts will be decided on whether or not the incident actually warrants the withdrawal of performance by investors. “

However, one industry founder who spoke on condition of anonymity does not expect the Wapi Pay team to take such a step even though they have legal grounds for it.

“As a young start-up in Africa, you really don’t want to get into a legal battle with a well-known international investor,” she said. “It sends the wrong message and will definitely hurt your fundraising prospects in the long run. “

Kepple Africa is one of the most active companies in Africa by the number of startups supported. In 2020, the Japanese fund invested in 36 African startups and, between January and July of this year, made 22 additional investments according to a Disrupt Africa report.

The Ndichu brothers withdraw

A first attempt at damage limitation saw Wapi Pay issue a declaration, in which it is said that the founders regretted the incident but that the facts were misinterpreted, and added that the brothers only got involved to help the ladies in conflict.

Another statement from the company’s board on Wednesday revealed that Edward, who is the CEO, and Paul, the executive director, will step down pending an investigation that is expected to last 30 business days. Meanwhile, COO Elizabeth Kariuki will assume the role of interim CEO.

Edward is also stepping down as a board member of the Association of Fintechs in Kenya (AFIK) pending investigations into the matter, the group said.

“The council takes this opportunity to declare that it regrets the current circumstances and does not condone gender-based violence or violence of any kind whatsoever.”

Currently based in Singapore, Wapi Pay has offices in Kenya and China, with plans to provide global payment solutions to merchants, businesses and individuals in Asia and Africa.

The startup has aroused significant interest from investors eager to support its development. But it remains to be seen whether the ongoing crisis, and the ensuing negative press and backlash from the founders now, will derail its long-term growth prospects.

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