Investors request audit of The Peer’s finances as it prepares to refund leftover capital

At least two investors in The Peer, the API startup backed by companies like Flutterwave and Stitch, have asked for an audit of the company’s accounts as it prepares to return leftover capital to investors. Following the business’s dissolution, investors are expected to receive about twenty cents on the dollar, people familiar with the conversations told TechCabal.

However, the refund may take longer than expected as two investors have requested an audit of The Peer’s finances and asked for more details on its cap table. The request for an audit—prompted by a November investor report showing a bank balance of $450,000—was initiated in March, weeks before the company shut down.

“The funds left in the company’s account were about a million dollars short, based on estimated company spends and time frame,” one email sent to co-founders—Michael Okoh and Chike Ononye—in March 2024 read.

The co-founders have not responded to the audit request and have not shared the cap table said one investor who asked not to be named. “They are avoiding it, thinking that if they do not talk about it, the matter will die,” an investor told TechCabal.

The discrepancy in the company’s balance and what some investors expected is connected to a claim by the cofounders, Chike Ononye and Michael Okoh, that some investors did not honor capital calls in their June 2022 fund raise.

Chike Ononye, The Peer’s cofounder, did not respond to multiple requests for comments.

Despite announcing a $2.1 million raise, the founders told one investor they did not receive $750,000. Another investor repeated this claim. None of the people who spoke to TechCabal for this story knew the investor who reneged on the funding commitment.

At least two investors were unaware of the $750,000 shortfall in that funding round, people with direct knowledge of the matter claimed. An audit of the company’s bank statements is expected to provide answers.

There are also some questions about how the company used its funds, as it reported burn rates of about $17,000 monthly. “The Peer was capital efficient during its operations,” one investor said.

However, at least two other investors have questions.

“They had only about 10 employees; the server costs ought to have been low as they did not process a lot of transactions due to low adoption, so it was hard to understand why only so little money was left,” one person with knowledge of the company’s operations told TechCabal.

The Peer’s shutdown didn’t surprise investors

By December 2023, the tone of investor updates suggested the founding team was lost and jaded, one investor shared.

Despite having a reputation as excellent coders, The Peer’s cofounders, who set out to connect wallets through its APIs, had difficulty fashioning a workable business model.

The startup was introducing a new way to make payments in a market but struggled to convince businesses to integrate its payment solution. It integrated 82 businesses in its lifetime, and only 25% were active.

The startup’s solution, which promised interoperability between wallets, could only scale if it had enough businesses on its platform but a failure to acquire enough businesses meant that product-market-fit was elusive.