Crypto based startup companies’ tries to secure funding in order to offer advanced services to its customers and to expand its business. Some startup companies manage to secure funding while few fail to secure funding.
Now Wala, a South African based crypto payment firm, is facing funding issues and has decided to close its business.
Wala, a fintech startup company, had expected to launch its own digital currency across the country but won’t be able to carry out this initiative as Wala failed to secure essential funding. This eventually made the company to take a bold step of shutting down its business.
Wala has finally been closed.
Wala, a 4-year-old company, started in 2015 initially offered access to loans and insurance, remittances and transactional banking. The startup firm uses to work with professional service providers to provide a complete set of financial services to customers.
Wala initially was not a crypto-powered company. It started focusing on crypto services in 2017. In the same year, Wala for the first time released Dala- utility crypto-based token. The startup firm believed that Dala would support in globalization and further development of growth and also support blockchain powered financial platforms for new markets. Wala achieved this by generating funding from investor Newtown Partners and later via token sale received additional of US 1.2 million.
Wala attracted more than 150,000 users within a few months, and they widely live in Uganda. The startup firm also received the Zambezi prize in 2018. However, the CEO and founder of Wala Tricia Martinez mentioned that the firm experienced problems.
She mentioned rewards drew the attention of scammers or users who discovered how to take benefits of a rewards system. This made the company to modify the rewards model numerous times, and it was necessary to remove customers who were misusing Wala’s system.
“The biggest problem we ran into was the infrastructure. Our partners’ systems would regularly turn off due to internet problems or their own poor infrastructure, which meant our users were unable to transact, which was the biggest use case for Dala. This crushed our user engagement and most importantly trust in our system. It also forced us to expand the scope for Dala. We had to build even more infrastructure than we anticipated at the start.”
One of the main reasons that made the firm to shut the business was funding.
Martinez stated Wala has little funding and minimum resources in order to deal with huge global issue. Wala has more than 150,000 Dala wallet users, and several associates were interested in working with Wala, the company had more on its plate but with minimum resources.
Wala failed to raise fund, but its team members believed that Wals’s strong growth might attract investors.
Wala started taking big steps by removing the maximum of its team employees and also closed deposits. On June 24th, finally, Wala closed its app completely.
Martinez told, during the beginning of the crypto winter, she started to raise fund, but it did not help the startup. Maximum of investors were not willing to support a crypto-based firm.
“For eight months, I traveled across the globe, pitching investors in blockchain, fintech, impact, African-focused… I met and engaged with over 100 investors, and despite our early growth numbers, we couldn’t secure the necessary financial support we needed to continue growing and operating.”