The short: Days after Ghana’s fintech company Dash raised $32.8 million in seed funding, the Bank of Ghana (BOG) shut it down for offering financial services without regulatory approval.
How Dash was built:
Dash launched in 2019 after CEO
Prince Boakye Boampong noticed a challenge with the interoperability of payment systems in Kenya. Legend has it that during a visit to Kenya, Boampong was fascinated by Kenya’s mobile money service M-PESA
, but noticed that users outside M-PESA’s ecosystem could not make transactions with M-PESA users. This means if you visit Kenya as a foreigner, you can’t make payments to M-PESA users with your bank app.
So, Dash was created as a unified payments platform to enable transactions between traditional banking services and mobile money operators in Kenya, Nigeria and Ghana. With this unified system, users can instantly transfer money to any bank, pay for goods & services, and split bills with friends. Sweet deal.
By the numbers:
Similar to other fintech startups, Dash’s revenue is driven by processing fees, premium subscriptions, and FX fees from cross-border transactions. According to TechCrunch
, Dash has processed over $1 billion from its 1 million userbase in Ghana, Nigeria & Kenya since 2020.
Impressive numbers, but the BOG isn’t messing around: One day, you’re on a high from announcing a $32.8 million raise, and the next day you’re explaining to investors why you got shut down for operating without approvals.
Ghana’s BOG claims Dash lacked approval to facilitate cross-border payments and other financial services. The BOG reminded other startups operating without licenses in Ghana that companies “offering payment services in the country without a license is an offense under Section 9 (1) of Act 987”.
Dash has not publicly spoken on its current dilemma.
Interestingly, the BOG waited two years to shut Dash down. So, the BOG must have been aware of Dash’s early operations but decided that the company wasn’t worth the attention until this significant raise.
includes engineers, designers, and finance folks, but a regulatory or policy affairs staff is visibly absent. Fintech is fast becoming a highly regulated sector in Africa, and Fintech companies must seek necessary approvals to operate.
For a company that styles its employees as “a motivated and fun group of skilled young humans who drink free Masala tea and battle each other at Jenga and charade”, – Dash needs to invest in adding a policy staffer to its roster so they can get back to playing Jenga.