News
Cryptocurrency Startup Mara Replaced by Jara After Financial Troubles
The news:
- Chinyere ‘Chi’ Nnadi, co-founder and CEO of Mara, a pan-African cryptocurrency exchange, has reportedly launched a new cryptocurrency firm, Jara, to replace Mara Wallet following financial troubles.
- Mara announced Raising $23 million in funding from Coinbase Ventures, Alameda Research (FTX), DAO Jones (a DAO investment backed by Mike Shinoda, Steve Aoki, and Disclosure), and approximately 100 other investors and angel investors, including Amit Bhatia and Hamad Alhoimaizi, upon launch on May 12, 2022, at a pre-funding valuation of $70 million.
- According to a copy of an audited financial report sent to investors in 2022, the startup lost $15.9 million.
A recent one relationship indicates that even though the company had no revenue in 2022 because it had no products, its expenses were already astronomical. It retained 130 employees and spent $9.1 million on salaries, bonuses, and benefits.
In a report to investors, Nnadi wrote that Mara paid high salaries to attract and retain top talent from companies like Apple and Yellow Card, which didn’t always deliver.
Founded by Nnadi, Lucas Llinás Múnera, Kate Kallot and Dearg OBartuin, Mara was an immediate success among investors, raising $23 million in May 2022.
Shortly after, Mara began building a crypto wallet and a layer-1 blockchain backed by Mara tokens. When Mara Wallet launched in February 2023, the company’s management ensured that everything was in order.
Mara, who claimed to have 4 million verified usersHe further stated that users in his community earned Mara tokens for educating others about cryptocurrencies.
According to internal documents seen by the publication, Mara’s company has burned through cash at an extraordinary rate. With only $5 million left in cash by the end of 2022, Mara began looking at fundraising in 2023, but nothing has materialized.
When Mara ran out of money, Nnadi registered a new cryptocurrency called Jara in the first quarter of 2024.
“Mara is no more,” was the Telegram message an anonymous community manager sent to about 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 of the new direction.
TechCabal reports that two cofounders who left the company in early 2023 claim the CEO founded Jara only to avoid liability 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 did not respond to multiple requests for comment.
Without revenue, the company had to reduce staff by June 2023 to save costs, would have to pay suppliers more than $3 million, and was at risk of closing.
Some former Mara executives attributed part of Mara’s financial problems to the way Nnadi spent company funds, with little oversight, and questioned how the money was being spent.