Tuesday, June 25, 2024

Kloud Commerce Board denies allegations

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The news:

  • According to a statement received by Techpoint Africa, Kloud Commerce’s board of Directors have said that the allegations of financial impropriety levelled against the company’s CEO are unfounded rumours peddled by a SAFE investor. 
  • The board, however, admitted that there had been disputes between the co-founders sometime in Q1 of 2022. 
  • It concludes that Kloud commerce was established on clear governance principles right from inception.

Kloud Commerce’s Board of Directors has denied allegations of financial impropriety levelled against the company’s CEO, Olumide Olusanya (DO)

On October 20, 2022, an investigative report by WeeTracker revealed that investors drafted a petition alleging that DO misappropriated company funds. The draft referenced instances such as diverting various sums of money invested into Kloud Commerce for personal ventures and burning investor money on expensive hotels and car rentals on dodgy trips outside Nigeria.

However, a statement received by Techpoint Africa stated that DO has only travelled outside of Lagos State, Nigeria once, to Accra, Ghana, in pursuance of Kloud Commerce’s aspirations.

It added that the allegations were unfounded rumours that a SAFE investor was spreading because of disagreements during the recapitalisation negotiations. 

According to WeeTracker, one of the investors said that the relationship between the co-founders had deteriorated due to DO’s attitude. 

Interestingly, investors were willing to invest another $250k in the company to salvage the situation. However, the investment was on the condition that DO step down while the co-founders took the reins.

One investor also said that a recapitalisation was done to reallocate shares with DO; however, DO backed out of the deal, maintaining his role as CEO and allegedly made himself Chairman of the board. 

The statement by the company’s board of directors admitted to the fact that there were disagreements between the three co-founders sometime in Q1 2022 about the product go-to-market roadmap. The disputes became apparent after the company missed critical product roadmaps. 

By April 2022, an inaugural board meeting was held to resolve the disputes. The resolution was to get more funding to provide the company with additional runway.  

The statement also mentioned that a SAFE investor made a recapitalisation offer that included a dramatic dilution of the company’s cap table and terms which shareholders disagreed with. 

The board claims it was during this period that the said SAFE investor began spreading rumours and unsuccessfully tried to rally other investors to get involved.

The board also said that DO “had unilaterally, voluntarily offered to step down and then completely recused himself from the CEO role, to avoid the personal issues with the said SAFE investor leading to an eventual collapse of the venture. Unfortunately, the interested parties could not reach an amicable resolution around the terms of the recapitalisation term sheets.”

While the statement points at a SAFE investor as spreading rumours of financial impropriety, WeeTracker’s investigative piece highlighted several investors corroborating the allegations.  

The statement did not address allegations of DO overworking engineers and demanding impossible timelines enforced with aggression. It, however, concludes by saying, “Kloud commerce was established on clear governance principles right from inception. Business ventures fail, that is the nature of entrepreneurship. The Board is grateful for DO’s service in spite of this eventual outcome for Kloud Commerce.”

It is also important to note that DO allegedly made himself the Chairman of the Board, according to the investigative piece. If the article is anything to go by, the board’s statement might be stating DO’s defence.

This is a developing story.

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