Luno Sister Company, Genesis, Files for Bankruptcy With Aggregate Liabilities of...

Three Nigerian startups are the latest to be accepted to the prestigious accelerator program, Y-Combinator. The 3 are part of the initial 85 startups that will be joining the W23 batch.

Here are the startups:

1.) Waza

Waza is a B2B payments infrastructure that provides the rails for global payments and intra-Africa trade.

“We make it more affordable & seamless for African businesses to fulfil their global payment obligations, treasury, and liquidity needs through our APIs and web platform. Think SWIFT for African businesses.”

Founded in 2022, the YC – backed startup has a team of 6, including co-founders, Emmanuel Igbodudu and Maxwell Obi.

2.) Shekel Mobility

Shekel Mobility is described as a simplified financing & operating system for car dealers in Africa, founded by Benjamen, Sanmi and Valentine.

Welcome to YC, @benoladokun, @valmayaki, Sanmi and team @ShekelMobility!

Shekel is building a simplified financing & operating system for car dealers in emerging markets, enabling them to launch & grow an auto-dealership business anywhere in the world.https://t.co/icKLlMJVQW https://t.co/cUCJv2jaB6

— Y Combinator (@ycombinator) January 9, 2023

With Shekel, Auto dealers can digitize their financial operations and get instant access to credit and resources needed to grow a sustainable business.

“Auto dealers are the most critical stakeholders in the automobile value chain. Yet, they have been neglected up until now and we are here to change that,” says CEO and Co-Founder, Sanmi Olukanmi.

The startup launched operations in January 2022 and has since grown to power $19M+ worth of transactions with over 1,000 dealers in their ecosystem. This has seen, not just the Ycombinator nod, but they have also recently raised $1,950,000 in a pre – seed round led by Ventures Fund.

3.) Bujeti

Bujeti offers an expense management platform dedicated to helping businesses of all sizes streamline their expense management processes and take control of their finances.

The platform allows for easy tracking and reporting of expenses, automatic reconciliation, and seamless integration with accounting software.

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About YCombinator

Ycombinator is one of the most attractive fellowship and accelerator programs for teams that are building in technology with the program having 7 startups in the previous batch, S22.

While three startups are now confirmed from Africa, more are expected to be announced over the coming months. The accelerator also invests a total of $500, 000 in accepted startups.

African startups that have been backed by YC have gone on to raise $1.5 more billion, with the inclusion of:

• Flutterwave
• Paystack
• Kobo360
• Cowrywise
• MarketForce
• WaystoCap
• WorkPay
• Healthlane
• Trella
• 54Gene
• CredPal
• Breadfast

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Crypto lender, Genesis, has filed for bankruptcy in January 2023, becoming the latest casualty from the fall of FTX in November 2022.

DCG Statement on Genesis Capital Chapter 11 Bankruptcy Filing: https://t.co/6SsWj4zo3R pic.twitter.com/j9e8R3mMZv

— Digital Currency Group (@DCGco) January 20, 2023

In its bankruptcy documents, the Digital Currency Group (DCG)-owned company listed over 100,000 creditors in a ‘mega’ bankruptcy filing with aggregate liabilities ranging from $1.2 billion to $11 billion dollars.

Genesis sister company, Luno, is not in immediate trouble following the events, according to its manager.

“DCG subsidiaries, like Genesis, have always operated as independent companies with their own management teams, financial and risk management protocols, and legal and compliance oversight. Luno is a wholly owned, independent operating subsidiary of DCG.” – Luno SA country Manager, Christo de Wi

Luno’s Savings Wallet product worked in partnership with Genesis as a lending partner for the product. Savings Wallet lets customers deposit cryptocurrencies and earn interest from Genesis loans but customers have to opt in to the service.

The Luno exchange (buying and selling crypto) uses a standard wallet and not the savings wallet. Still, Luno insured the Savings Wallet so when Genesis halted redemptions in November 2022 after FTX crashed, the South African firm could return all customer funds.

This is in contrast to US crypto exchange, Gemini, which has a similar product, the Gemini Earn product, letting customers deposit their crypto for investment by Genesis. When Genesis halted redemptions, Gemini Earn customers couldn’t withdraw their balances, with upto $900 million of Gemini customer funds now in question.

Chapter 11 bankruptcy lets a firm continue operating while trying to work ways to repay creditors. Genesis plans to use the Chapter 11 process to try to sell assets or raise money, with creditors ending up owning the reorganized business if those efforts are unsuccessful, it said in a statement.

With customer funds in question and Gemini threatening to sue, there is the larger threat of Genesis and Luno parent company, DCG, having also to file for bankruptcy in what could have ramifications to all its assets.

“These scenarios are highly speculative and we prefer not to speculate at this stage,” De Wit said. “As a significant participant in the crypto market, however, Luno consistently monitors any events that could have an impact on its business or the market more broadly.”

“In light of Luno’s ownership structure and independence, the business is favourably positioned to navigate uncertainty.”

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