Chinyere ‘Chi’ Nnadi, the Co-founder and CEO of Mara, a Pan-African cryptocurrency exchange, has reportedly initiated a new crypto venture named Jara. This move comes as a strategic pivot from the previous Mara Wallet, which the company is replacing due to financial challenges.
Mara made headlines when it announced a successful funding round on May 12, 2022, securing $23 million from a host of prominent investors. The investment round included contributions from Coinbase Ventures, Alameda Research (associated with FTX), DAO Jones (an investment DAO with backers like Mike Shinoda, Steve Aoki, and Disclosure), and nearly 100 other investors and angels, including names like Amit Bhatia and Hamad Alhoimaizi. This funding was raised at a pre-money valuation of $70 million.
However, an audited financial statement shared with investors for the year 2022 revealed that the startup incurred a substantial loss of $15.9 million. The report also highlighted that despite not generating any revenue in 2022 due to the absence of a marketable product, the company’s expenditures were significantly high. Mara maintained a workforce of 130 employees and allocated $9.1 million towards salaries, bonuses, and allowances.
In communications with investors, Nnadi pointed out that Mara offered competitive salaries to attract and retain elite talent from prestigious companies such as Apple and Yellow Card. However, the high compensation did not always correlate with expected performance outcomes.
Mara, co-founded by Nnadi, Lucas Llinás Múnera, Kate Kallot, and Dearg OBartuin, quickly garnered investor interest, securing $23 million in funding shortly after its inception in May 2022. Following the funding, the company embarked on developing a crypto wallet and a proprietary layer-1 blockchain, which would be supported by Mara tokens.
Despite the financial difficulties, Mara Wallet was launched in February 2023, with the company’s leadership assuring stakeholders that operations were proceeding smoothly. The transition to the new crypto company Jara represents a significant shift in strategy as the company seeks to navigate through its financial turbulence and reposition itself in the cryptocurrency market.
Mara, the Pan-African crypto exchange that once boasted a verified user base of 4 million individuals, also claimed that it was rewarding its community members with Mara tokens for spreading knowledge about cryptocurrency.
However, internal documents accessed by various publications painted a picture of a company that was rapidly depleting its financial resources. By the close of 2022, Mara was left with a mere $5 million in cash reserves. In light of this, the company contemplated initiating another round of fundraising in 2023, but these efforts did not come to fruition.
As the financial situation became dire, Nnadi took decisive action in the first quarter of 2024 by registering a new cryptocurrency entity named Jara. This move marked a significant transition from the previous venture.
The shift from Mara to Jara was communicated to the community in a rather abrupt manner. An anonymous community manager relayed the message to the nearly 10,000 members of the Mara Telegram group, stating, “Mara no longer exists.” The message directed users to download the new Jara app, which is described as a non-custodial crypto wallet. It also conveyed to the users that the pivot to Jara was a strategic move that had received the backing of the company’s investors, suggesting that this new direction was part of a broader consensus among stakeholders.
According to a report by TechCabal, there has been a significant development involving the internal dynamics of the cryptocurrency company Mara. Two co-founders who departed from the company in early 2023 have made allegations regarding the CEO’s motivations behind the establishment of the new crypto company, Jara. They assert that the CEO’s decision to create Jara was driven by a desire to evade the liabilities associated with Mara. This claim suggests that the launch of Jara may be an attempt to distance the new venture from the financial obligations and challenges that Mara had accumulated.
The situation at Mara, once a promising player in the cryptocurrency exchange arena, has taken a turn as per the account of two former co-founders. In a note addressed to investors, they lamented the direction in which the company was steered, stating, “Mara could have been something extraordinary, but its CEO took it down a dark and rotten path.” These remarks cast a shadow over the leadership and decision-making at the helm of Mara. Despite multiple attempts to reach him for a statement, CEO Chinyere ‘Chi’ Nnadi did not respond to requests for comments.
As the financial crisis within the company deepened, with no revenue streams in sight, Mara found itself compelled to downsize its workforce by June 2023 in an effort to curtail expenses. The company was also reported to be in debt to its vendors to the tune of over $3 million, a situation that put the company at risk of ceasing operations.
The financial woes of Mara have been further scrutinized by some of its former executives, who have raised concerns about the manner in which Nnadi managed the company’s funds. There were questions raised regarding the level of oversight over the CEO’s spending, suggesting that the financial challenges faced by Mara may have been exacerbated by fiscal mismanagement.
