For a moment, it worked as planned. As CoinDesk reported last summer, a user in South Africa could pay their mom’s electricity bill in Uganda using a crypto-powered payments app called Wala.
But despite early traction in facilitating remittances and other small payments for Africa’s underbanked, Wala was effectively broke by early 2019, laying off its staff and closing access to the company’s flagship app in February.
CEO Tricia Martinez published a blog post in June attributing the company’s hardships to Africa’s poor infrastructure. In a recent interview with Decrypt, Wala co-founder Samer Saab also claimed new Ugandan regulations and unreliable internet infrastructure sparked an exodus of users from the nascent platform.
But three sources with knowledge of the company’s operations, who spoke on the condition of anonymity, tell quite a different story.
They told CoinDesk that Martinez spent funds from 2017’s $1.2 million initial coin offering (ICO) on expensive equipment and international travel, as well as posh accommodations like a spacious office in Cape Town.
CoinDesk was able to confirm there were active user accounts at the time of the shutdown. However, since Wala lacked a revenue model, the company quickly burned through its resources, regardless of an earlier $1 million seed round raised from investors like Vinny Lingham’s Newtown Partners.
Wala employed roughly eight staffers in South Africa, had a network of “ambassadors” and had struck partnerships with local payment processors across Africa so that customers could cash out in fiat if needed.
In terms of hiring local and producing a live product for underbanked users through brands they already trusted,