Kloud Commerce, a Nigerian e-commerce platform, has reportedly closed its doors following a series of disputes between its founder, Dr Olumide ‘D.O’ Olusanya, and the company’s investors. The startup raised $765,000 in pre-seed funding from investors who later claimed that Dr Olusanya’s misappropriation of funds and questionable decision-making led to the demise of the company.
Allegations against Dr Olusanya
The allegations included that Dr Olusanya gave false updates to investors while demotivating employees, preventing the company from developing its core product. The board of Kloud Commerce refuted the allegations, but the composition of the company’s board of directors was unclear at the time.
Petition to EFCC
Investors were reportedly compiling a petition in 2022 and considering a report to the Economic and Financial Crimes Commission (EFCC), alleging that Dr Olusanya misappropriated company funds. The allegations were based on an account audit that suggested the founder had diverted various sums of money invested in Kloud Commerce for personal ventures, put personal expenses on the company’s accounts, and burned investor money on expensive hotels and car rentals on dodgy trips outside Nigeria.
EFCC operatives reportedly visited the Gloopro offices in Lekki in October 2022, and Dr Olusanya was invited to the EFCC office. He remained in EFCC custody on Monday, according to sources close to the situation, and was released on Tuesday.
Investors with knowledge of the matter declined to comment. Kloud Commerce’s rebuttal of the allegations claimed that the root of the dispute was an unhappy SAFE investor who disagreed about the terms of recapitalization. Kloud Commerce had reportedly run out of money, and some investors looked to invest only on the condition that D.O. stepped down as CEO. Ultimately, both parties could not reach an agreement, and the business shut down instead.
The situation remains a developing story, and an email to the lawyers who represented Kloud Commerce in 2022 was not replied to at the time of this report.
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