News
Cryptocurrency startup Mara replaced by Jara following financial difficulties
The news:
- Chinyere ‘Chi’ Nnadi, co-founder and CEO of Mara, a pan-African crypto exchange, has reportedly launched a new crypto company – Jara – to replace Mara Wallet, following financial troubles.
- Mara announcement raised $23 million in funding from Coinbase Ventures, Alameda Research (FTX), DAO Jones (an investment DAO backed by Mike Shinoda, Steve Aoki and Disclosure) and nearly 100 other investors and angels, including Amit Bhatia and Hamad Alhoimaizi, when it launched on May 12, 2022, at a pre-money valuation of $70 million.
- According to a copy of an audited financial statement sent to investors in 2022, the startup lost $15.9 million.
A recent report says that even though the company had no revenue in 2022 because it had no product, 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 who did not always meet their expectations.
Founded by Nnadi, Lucas Llinás Múnera, Kate Kallot and Dearg OBartuin, Mara has seen immediate success with 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 assured that everything was in order.
Mara, who claimed to have 4 million verified usersalso said that users in his community earn Mara tokens by educating others about crypto.
According to internal documents seen by publications, Mara has been burning through cash at an extraordinary rate. With just $5 million in cash remaining at the end of 2022, Mara began considering a 2023 fundraising round, but nothing materialized.
As Mara ran out of money, Nnadi registered a new cryptocurrency named Jara in the first quarter of 2024.
“Mara is no more,” is the Telegram message an anonymous community manager sent to nearly 10,000 users of 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 co-founders who left the company in early 2023 claim the CEO only created Jara to avoid being responsible for Mara’s debts.
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“Mara could have been something extraordinary, but his CEO led him down a dark and rotten path,” the two co-founders noted in a note to investors. Nnadi did not respond to multiple requests for comment.
With no cash coming in, the company had to cut its workforce by June 2023 to cut costs. It reportedly owed more than $3 million to suppliers and was at risk of closing its doors.
Some former Mara executives have attributed some of Mara’s financial problems to the way Nnadi spent company funds with little oversight, questioning how the money was spent.