In a significant strategic move, Nigerian bookkeeping and finance startup Kippa has decided to discontinue its agency banking business, KippaPay, leading to the layoff of 40 employees. The decision was made public through an official blog post, confirming recent reports speculating the company’s shift in focus. KippaPay’s journey will come to an end, with the last day for affected employees set for November 30, as the company reshapes its future endeavors.

The company had previously raised an impressive $8.4 million in September 2022, securing support from global investors, including notable names such as Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, and others. This substantial investment was intended to fuel Kippa’s agency banking ambitions following the acquisition of a super agent license, aiming to penetrate the competitive agency banking space, where incumbents with substantial financial backing like OPay and Moniepoint had already established significant market share.

Kippa displayed its commitment by recruiting ex-regulators and former senior executives from top fintech startups, including OPay, BharatPe, Khatabook, TeamApt, OKCredit, NIBSS, and Unified Payments, among others, for its uphill battle. At its peak, Kippa boasted an impressive network of approximately 15,000 agents, yet profitability proved elusive.

A spokesperson for Kippa acknowledged the challenges, stating, “The macroeconomic conditions in Nigeria, especially the devaluation of the naira, ate deeply into our margins, and our customers’ businesses have suffered over the past six months.”

In a recent blog post by Kippa’s CEO, the decision to discontinue KippaPay was officially revealed, with Ekezie stating, “Starting November 15, our KippaPay product will no longer be available for use by merchants. For now, the startup will be resolving any pending settlements and helping its merchants and partners transition off the product.”

The company also disclosed plans to shutter Kippa Start, a product that allowed users to register their small businesses online for ₦20,000 ($26). This strategic decision narrows Kippa’s focus down to its renowned bookkeeping mobile app, a tool that empowers small business owners to efficiently manage their daily income and expense transactions, issue invoices, provide receipts to their customers, and create essential marketing materials such as business cards. Additionally, the app aids in tracking outstanding debts.

While this change in direction might come as a surprise, an inside source revealed that Kippa had already achieved a significant portion of its revenue goals for the year by the end of the first quarter, making this pivot unrelated to poor revenue performance. Instead, the decision is motivated by a strategic need to curb rising operational costs associated with running the POS product.

Kippa’s evolution signifies the adaptive nature of startups in today’s fast-paced business environment. As the company refocuses its efforts, it remains to be seen what new opportunities and innovations will emerge in the ever-evolving world of Nigerian fintech.