Crowdyvest gives reasons for opting to convert ₦7.7 billion debt it owes customers to equity

Temitope Omotolani, the CEO of Crowdyvest Limited, a Nigerian startup crowdfunding platform that provides the opportunity for retail investors to fund a range of individuals in the agricultural sector, has opted to convert customers’ debt to equity. Due to the fact that they owe 3,700 crowdfunding investors ₦7.7 billion, according to an internal document seen by TechCabal. The company defaulted on its payment obligations to customers in 2021, and in that time, it has never disclosed its total debt outlay.

Before 2021, Crowdyvest, which was launched in 2019,  was said to be part of EMFATO Holdings, an investment company that housed Farmcrowdy, Crowdyvest, and Treepz (formerly Plentywaka). However,  when it left the EMFATO group in March 2021, it also took on Farmcrowdy’s debt.

Therefore, having hit rock bottom over the case of being unable to recover more than ₦2 billion from its partners, it intends to convert ₦5.7 billion to equity in Crowdyvest Management Limited. It was proposed that customers would own 35% of the embattled company.

“As a business, we’re dealing with the hard truths of what is lost, what is still redeemable, and what can be done to solve this completely,”

explained Omotolani. “We have come to the realization that our commitment to meeting our obligations to all stakeholders can only be legitimately fulfilled if we remain a viable and continually improving entity,” she added.

“We are concurrently exploring opportunities for our members to get quarterly payout as we recover funds from project partners that are owing us,” Temitope Omotolani, Crowdyvest CEO, told TechCabal in an email.” The company expects to recover around ₦2 billion from some of the businesses it funded within the next two years. Per the same internal document, those monies will be disbursed to investors by a registered asset manager.

Key highlights of the decision are as follows:

As an alternative to refunding the debt, adopting a similar approach by Patricia, the crypto company that lost $ 2 million In customer assets, the involved customers at a loss over the debt will own 35% of the company. Converting the major part of the debt to company shares.