Mara, a pan-African crypto exchange backed by prominent investors like Coinbase Ventures and Alameda Research, faced a dramatic collapse just two years after its launch. The startup, founded in 2021 with a vision to “build Africa’s crypto economy,” burned through $16 million in 2022, with its leadership falling apart and financial mismanagement at the core of its downfall.
From Promising Start to Financial Woes
Flush with $23 million in funding by May 2022, Mara set ambitious goals, including developing a crypto wallet and a blockchain powered by its Mara tokens. However, despite claiming to have “4 million verified users” upon launching Mara Wallet in February 2023, internal reports reveal that 75% of those accounts were fraudulent, incentivized by a referral program. Mara also faced mounting costs, including $9.1 million spent on salaries and bonuses for its 130 employees in 2022.
Without any product revenue in 2022 and only $5 million in cash left by the year’s end, Mara struggled to secure follow-on funding in 2023. The crypto winter and the exit of three cofounders further scared off investors. By mid-2023, Mara had downsized its team twice, accrued $3 million in vendor debts, and was at risk of bankruptcy.
Leadership Controversies
CEO Chinyere “Chi” Nnadi became the center of criticism as cofounders accused him of mismanagement. Nnadi registered a new entity, Jara, in early 2024, leading critics to claim the rebrand was an attempt to sidestep Mara’s debts. Internal financial statements showed directors earned a combined $2.6 million in 2022, with Nnadi’s undisclosed salary raising further concerns about how funds were spent.
Nnadi defended the rebrand to Jara, citing issues with Mara’s past engineering efforts and emphasizing a renewed focus on African transaction practices. He also claimed to have invested $700,000 of his funds into Jara.
Fraud Allegations and Fallout
Mara faced allegations of internal theft, with Nnadi reporting that an employee stole $600,000 during the company’s first over-the-counter (OTC) transaction. Meanwhile, questions about a $500,000 donation to the Mara Foundation, the company’s nonprofit arm, led to legal scrutiny, including claims of formal action by the Swiss government.
Jara: A Fresh Start or Avoidance of Accountability?
By April 2024, Mara ceased operations, replaced by Jara, a non-custodial crypto wallet. While Mara’s Telegram community of nearly 10,000 users was urged to transition to Jara, former executives accused Nnadi of creating Jara to evade Mara’s financial liabilities.
Investor and Community Response
Mara’s high-profile investors, including Coinbase Ventures, have remained silent about the rebrand and the controversies. Critics continue to question the lack of oversight in Mara’s operations, the company’s financial practices, and Nnadi’s leadership, raising doubts about Jara’s prospects as it attempts a fresh start.
This collapse highlights the challenges faced by ambitious startups during the crypto boom and the accountability issues that can emerge in high-growth ventures.
