The news:
- Chinyere ‘Chi’ Nnadi, Co-founder and CEO of Mara, a Pan-African crypto exchange, has reportedly launched a new crypto company — Jara — to replace Mara Wallet, following financial problems.
- Mara announced raising $23 million in funding from Coinbase Ventures, Alameda Research (FTX), DAO Jones (investment DAO backed by Mike Shinoda, Steve Aoki and Disclosure), and nearly 100 other investors and angels including Amit Bhatia and Hamad Alhoimaizi when it launched on May 12, 2022, at a pre-money valuation of $70 million.
- According to a copy of an audited financial statement sent to investors in 2022, the startup lost $15.9 million.
A recent report indicates that although the company didn’t record any revenue in 2022 since it had no product, its expenses were already astronomical. It retained 130 staff and spent $9.1 million on salaries, bonuses, and allowances.
In one report to investors, Nnadi wrote that Mara paid high salaries to attract and retain top talent from companies like Apple and Yellow Card who didn’t always deliver.
Founded by Nnadi, Lucas Llinás Múnera, Kate Kallot, and Dearg OBartuin, Mara was an instant hit with investors, raising $23 million in May 2022.
Soon after, Mara started building a crypto wallet and a layer-1 blockchain backed by Mara tokens. When Mara Wallet launched in February 2023, the company’s leadership assured all was in order.
Mara, which claimed it had 4 million verified users, also stated that users in its community were earning Mara tokens for educating others about crypto.
Per internal documents seen by publications, the company Mara burned through cash at an extraordinary pace. With only $5 million left in cash by the end of 2022, Mara started considering fundraising in 2023 but nothing materialised.
As Mara ran out of money, Nnadi registered a new crypto named Jara in the first quarter of 2024.
“Mara no longer exists,” was the Telegram message an anonymous community manager sent to nearly 10,000 users in the Mara Telegram group, urging them to download the new Jara app—a non-custodial crypto wallet. The message assured users that the company’s investors approved the new direction.
TechCabal reports that two cofounders who left the company in early 2023 claim that the CEO only established Jara to avoid responsibility for Mara’s liabilities.
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“Mara could have been something extraordinary, but its CEO took it down a dark and rotten path,” both co-founders noted in a note to investors. Nnadi didn’t respond to multiple requests for comments.
With no money coming in, the company had to cut its staff size by June 2023 to save costs, reportedly owed vendors more than $3 million, and risked shutting down.
Some former Mara executives attributed some of Mara’s financial problems to how Nnadi spent company funds with little oversight, questioning how money was spent.
