Investors likely to dump Ghanaian FinTech over scandal

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fintech
FIntech

Dash, the Ghanaian fintech startup that raised a notably substantial seed round of $32.8 million last year to revolutionize the African digital payments landscape, is facing an unravelling of its fortunes, as its major investors are said to be actively seeking to dispose of it, including its licenses, after a case of setbacks and a cloud of controversy.

Dash came onto the scene in 2019 with an ambitious vision: to bridge the gap between mobile money wallets and traditional bank accounts across Africa, facilitating seamless cross-border transactions.

The startup, operating under an entity known as Spektra Technologies Inc, set out to enable users from different countries—starting with Ghana, Nigeria and Kenya—to connect their bank or mobile money accounts to Dash, pay bills, and send and receive money; a single app for payments across borders.

The strategy was to draw revenue from processing fees, savings, foreign exchange fees, commissions, and subscriptions.

The company’s founder and CEO, Prince Boakye Boampong, garnered attention for his audacious plans and ambitious take on e-wallet interoperability, attracting investors keen on Africa’s booming fintech scene.

However, Dash’s fortunes have taken a turn since it raised a total of US$52.8 million in two separate funding rounds last year, leaving investors and observers alike bewildered.

Earlier this year, Dash’s fate seemed precarious as rumours swirled about the Founder’s suspension and investigations into alleged financial impropriety and misreporting. Boampong was replaced by the board and an audit was called, TechCrunch reported, citing sources that also said the founder secured a windfall in secondaries.

In a December 2022 investor update seen by WT, Boampong declared that Dash’s total users had grown to around 4.5 million in Q4 2022, with total payment value (TPV) hitting USD 560 M and revenue of USD 13.7 M in the same quarter. TPV in the previous three quarters stood between USD 500 M and USD 700 M with revenue ranging from USD 13 M to USD 18 M, the founder told investors.

Additionally, previous coverage by TechCrunch noted Dash’s markedly explosive growth spurt; going from 200,000 users and US$250 million in transaction value in October 2021 to 1 million users and US$1 billion in processed value by March 2022. This meant Dash had quadrupled its transaction value and quintupled its user count within five months, per numbers shared by Boampong.

Subsequent investigation revealed the numbers and transaction volumes that once touted the company’s meteoric rise were elaborate fabrications intended to mislead investors, the sources said.

Boampong, who previously co-led a YC-backed media startup, now finds himself suspended from Dash on allegations of falsifying figures and orchestrating a scheme to artificially inflate the startup’s growth figures.

Efforts to reach Boampong for comments proved abortive as requests went unanswered.

Ghana

Meanwhile, in Ghana where Spektra Technologies hails from, the company is still struggling to get a valid license since it was unplugged by all of its licensed payment service provider (PSP) on the orders of the Bank of Ghana (BoG).

BoG cited Dash App for operating illegally in Ghana because it did not have a license. The company has since began a process to acquire a valid license at home, but the recent scandal around falsification of performance figures and misreporting, make life even more difficult for the company.

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