Startups thrive on collaboration. In the competitive yet high-growth landscape of African tech entrepreneurship, partnerships often resemble tightly knit alliances. But what happens when these alliances unravel into a web of allegations, legal battles, and shattered trust? Recent events in Morocco and Nigeria paint a grim picture of the hidden perils in Africa’s nascent tech ecosystem.
In Morocco’s Casablanca-Settat region, Pip Pip Yalah, a leading long-distance carpooling app with over 400,000 members, finds itself ensnared in an unexpected legal quagmire. Founded in 2019 by Hicham Zouaoui and Otman Harrak, the startup was designed to transform urban mobility. Yet, it is now battling a judicial freeze on its bank accounts — a move initiated by telecommunications giant INWI.
According to Zouaoui, the trouble began in December 2022, when a hacking incident at INWI led to a technical error that allowed international SMS to be sent without the startup’s knowledge or consent. This breach resulted in an invoice of 167,000 MAD (approximately $16,700), despite Pip Pip Yalah’s contract covering only national SMS. Frustrated by the inadequate response from INWI, the startup terminated its contract and obtained a signed acknowledgment of receipt from the telecom provider.
Yet, INWI’s response took a dramatic turn. Without notifying Pip Pip Yalah, the telecom company secured a court decision to freeze the startup’s bank account. “Imagine yourself in our position,” Zouaoui lamented. “A small startup striving to innovate and make an impact on urban mobility, facing a technical error caused by a large provider, and subjected to judicial decisions made without prior notification. Is this fair?”
While INWI has yet to publicly respond, the company’s litigious streak is well-documented. Last year, it secured a landmark victory in Morocco’s Court of Appeal, which upheld a judgment ordering state-owned Maroc Telecom to pay 6.3 billion dirhams (USD 630 million) for abuse of market dominance. Though groundbreaking for anti-competitive practices, such legal maneuvers leave smaller players wondering if Morocco’s judicial system disproportionately favors corporate giants.
Further south in Nigeria, the collaboration narrative shifts from disputed invoices to allegations of financial mismanagement. Bento Africa, an HR-tech startup founded in 2019, is the latest subject of attention. The startup is reportedly under investigation by the Lagos Inland Revenue Service (LIRS) and the Economic and Financial Crimes Commission (EFCC) for allegedly failing to remit taxes and pension contributions on behalf of its clients. These allegations have sparked a wave of client departures, with major firms like Moniepoint, Paystack, Kobo360, and Bamboo reportedly severing ties in 2024.
Last year, Rotimi Olawale, founder of YouthHubAfrica.org, shared his frustrations with Bento Africa publicly:
“I am getting into a legal battle with Bento Africa next week,” he said. “For one year, Bento delayed payments of deductibles from us and failed to remit to FCTIRS on time for PAYE. Now we’ve been fined roughly ₦1 million for late payment of PAYE. While I’ve moved away from Bento Africa services due to terrible delays and bad customer service, I wrote to them asking how we would handle this fine that occurred during their service period. They’ve ignored my emails. I even copied Ebun Okubanjo, the firm’s CEO, on two emails, but received no response. I won’t pay a fine for a service I paid Bento Africa to deliver, which they executed poorly.”
Fuelmetrics, a fuel station inventory management company, is another startup affected by the alleged breach of trust. The startup’s co-founder Ayodeji Ogundiran claims Fuelmetrics incurred ₦50 million (approximately $108,000) in unpaid taxes and pension contributions due to Bento’s alleged negligence. Akintunde Sultan, co-founder of the edtech startup AltSchool, has accused Bento of forging tax receipts and remitting as little as ₦100 monthly, despite collecting far larger sums from startups.
While Ebun Okubanjo, Bento’s CEO, has acknowledged receiving complaints from the LIRS and confirmed that the company is working on a remediation plan, he downplayed the issue, describing the affected clients as “a very small percentage… who happen to be very vocal.”
Okubanjo declined to share specific figures but attributed the challenges to the complexities of Nigeria’s tax and pension systems, stating that achieving a “zero percent error rate is hard, maybe impossible.” He claimed that discrepancies account for “less than 1%” of processed transactions.
A Betrayal of Trust
The African startup ecosystem, which has long prided itself on collaboration, now faces uncomfortable questions about trust. In Morocco, Pip Pip Yalah’s plight is a good indication of the vulnerabilities startups face when partnerships with larger entities sour. In Nigeria, Bento’s saga reveals the devastating consequences when companies entrusted with critical responsibilities fail to deliver.
Interestingly, a report titled A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories highlights that over a third (38%) of Nigerian startups have partnered with other startups. This dwarfs the 26% that have corporate partnerships, showing how much the ecosystem leans on inter-startup collaboration. But as the cases of Pip Pip Yalah and Bento demonstrate, when trust breaks, the consequences can be far-reaching, including reputational damage, and distrust in such inter-startup partnerships.
In a region where innovation often outpaces regulation, these stories serve as major warnings. African startups have proven their resilience time and again, but as these recent controversies show, success in this ecosystem isn’t just about scaling quickly — it’s about sustaining trust in a field where the lines between collaboration and exploitation are increasingly blurred.