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When the fintech went into the market to raise its seed round at the height of the venture capital boom in late 2021, it claimed 200,000 users across Ghana, Kenya and Nigeria while processing over $250 million in transaction volume.

This event, along with that of Float, a Ghanaian fintech launched by another OMG Digital co-founder that’s dealing with issues around mismanagement of funds, re-ignited conversations about how lax due diligence has been in African tech over the past 18 months, where FOMO and being founder-friendly became the norm.

Good VC fund managers consistently evaluate their investment processes and screens not just to minimize the risk of bad actors but also to maximize the chances of making the kinds of decisions that drive great outcomes.

If I were an LP at any VC fund that had exposure to the aforementioned shutdowns, especially the local VCs (as the relative loss in terms of percentage of the portfolio would be significant), I would demand a comprehensive audit to understand what happened exactly, what could have been done better and where investors may have fallen short so that actionable steps can be taken to prevent or better contain such incidents in the future.

At DCG Expeditions we believe in a co-invest strategy with local investors and will continue working with the leading VCs in Africa, many of whom we tag team within tight coordination on diligence efforts, to back some of the most ambitious founders on the continent.

Now, the main difference for our firm is ensuring that there is a financial operator as a core member of the team from day one, a decision maker with equity, and at minimum having a contract or an outsourced CFO from the initial stages.

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