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Nigerian Fintech Player, Cova, Bows Out: What Led to the Shut Down

Nigerian wealthtech startup Cova, co-founded by ex-Printivo CEO Olu'yomi Ojo and Yomi Osamiluyi, is closing due to "Several factors," as stated in an email to users on Tuesday. Despite providing an important solution, the co-founders realized the product "Was not gaining any traction" two years in. Ojo, in an undated email, explained, "We have about a year of runway left, but it is better to act in the interest of Cova investors and stakeholders than to burn through the cash." Cova, which raised at least $800,000, offered subscriptions from $10 to $100 per month or year.

Staff Editor January 25, 2024

It’s always a blow when a promising startup shuts down, leaving behind a trail of dashed hopes and unfulfilled potential. Nigerian wealthtech startup Cova, co-founded by Olu’yomi Ojo and Yomi Osamiluyi, has recently announced its closure, citing “several factors” for this decision. This comes as a surprise to many, given the initial optimism surrounding the venture.

In his business memoir Vantage, Olumide Soyombo, a notable figure in Nigeria’s investment landscape, highlighted the importance of Cova’s solution. However, despite its relevance, the startup struggled to gain traction in the market. Ojo, in an email to investors as chronicled in Soyombo’s memoir, expressed the team’s careful evaluation of their financial situation. With approximately a year of runway left in the bank, the co-founders opted to prioritize the interests of Cova’s investors and stakeholders rather than continuing to deplete the funds without a clear path to profitability or substantial revenue.

The startup had raised a significant amount of capital, with at least $800,000 coming from investors, including Soyombo himself. Cova’s business model revolved around offering subscriptions ranging from $10 to $100 per month or year. Users could link their Cova profiles to various financial accounts, including local and international bank accounts, savings apps like Piggyvest and Cowrywise, investment platforms like Risevest and Bamboo, and crypto-wallets. Despite these offerings, Cova’s user base, though global, was only able to sync bank accounts in Nigeria, the UK, and the US.

The closure of Cova underscores the challenging and competitive nature of the startup landscape, even in burgeoning sectors such as wealthtech. While the demise of Cova is undoubtedly disheartening, it also serves as a reminder of the unpredictable and unforgiving nature of the business world. It’s a harsh reality that not all ventures, no matter how promising they may seem, will succeed.

As the entrepreneurial ecosystem continues to evolve, the lessons learned from Cova’s journey can provide valuable insights for both aspiring and established entrepreneurs. From the importance of market traction to the criticality of a clear path to profitability, the story of Cova serves as a cautionary tale and a source of wisdom for those navigating the turbulent waters of startup ventures.