Kloud Commerce founder, Olumide D.O. Olusanya, was detained on Monday by Nigeria’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC), according to a TechCabal report this week. The capture was made at Olusanya’s other company, Gloopro, in Lekki.
When the report first came out, it was said that his invitation and ensuing detention by the EFCC had something to do with Kloud Commerce’s closure.
According to a report from October 2022, a number of Kloud Commerce’s investors were unhappy with Olusanya’s handling and administration of the business.
Flying Doctors, Zedcrest, and LoftyInc Capital were rumored to have made investments in the company’s pre-seed round even though they weren’t specifically mentioned in that story. The investors allegedly accused Olusanya of financial misconduct, according to WeeTracker’s account. “I think he mismanaged the funds that we invested and misled us as investors,” one investor told WeeTracker. A founder rarely spends nearly $1 million without being able to create even a minimally feasible product.
Investors were said to have been considering judicial action at the time. An investor petition was mentioned in the business magazine Tekedia.
However, for the remainder of 2022, the owners delayed deciding whether to bring a lawsuit against Olusanya.
Concern about legal proceedings
Investors were hesitant to sue Olusanya, according to a source familiar with the case who spoke to TechCabal. This was motivated by concerns about the bad press it might generate and the possibility that it might give investors grounds to sue a founder.
Several sources did, however, corroborate that the investors were upset about the circumstance in private and worried that failure to punish wrongdoers might send the wrong message to founders.
Just as the fintech unicorn Flutterwave worked on a blacklist with other fintechs after their alleged hack, it is possible that local VC firms may institutionalise their response to bad actors as well.
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