Pan-African crypto company, Mara, which made headlines when it raised $23 million in one of the biggest Web3 raises on the continent, has laid off approximately 85% of its employees and implemented salary cuts for remaining employees, a new report alleges.
Quoting a source within the company, the report by Technext publication said these actions have been presented as an ‘elimination of redundant roles’ in order to transition the company into its next phase.
“They said they needed to keep the team smaller, because they have set up a lot of things and done enough PR and marketing and have gotten the hype they needed and now they needed to lay off unnecessary roles,” the source claimed.
The source pointed to alleged over-spending including heavy marketing expenses, over-paying salaries to international Web3 standards as reasons behind the company’s struggles.
Some of the big spend markting activities in 2022 include:
- Sponsoring crypto events including the 2022 Afro Nation Ghana event
- Sponsored Ghana Football team to 2022 2022 FIFA World Cup for a sum of $1 million
- Sponsored celebrities and influencers to wear the Mara jerseys at the 2022 FIFA World Cup in Qatar at $10,000 – $15,000 per influencer
- Hired student brand ambassadors on university campuses across Africa
As per the source, Mara’s workforce expanded to approximately 200 employees at a certain stage. However, it is claimed that a portion of the newly hired team members held redundant positions within the company. Despite this, Mara reportedly offered generous compensation packages to its employees, aligning with the standards observed in international Web3 companies.
Crypto startups on the continent are turning out to be exactly what you thought: entities providing solutions to problems that don't exist. That or they're just money laundering enterprises. Because, why are they failing despite raising so much money? https://t.co/FGL4OvdAUu
— permanent irrefutable public user (@echenze) June 6, 2023
Ex-employees of Mara have alleged that the company engaged in over-hiring and providing excessive compensation to staff during a period of significant growth. However, these same sources claim that under the pretense of ‘team restructuring,’ Mara resorted to laying off employees when they could no longer sustain such high standards.
Mara is also said to have lost money when FTX collapsed, though this is not elaborated upon. FTX sister firm, Alameda Research, was one of several prominent investors in the 2022 funding round, part of a list which includes Coinbase Ventures and Distributed Global.
Plans to launch its own blockchain and native token in Q4 2022 came to a halt following the FTX collapse. According to the original report, funds were drying up, revenue was not coming in as anticipated, and they had lost money in FTX.
“Last year, Mara raised $23M to support our vision to help Africans build wealth. We launched MARA Wallet, which already has over four million verified users. We also launched the Mara Foundation, a non-profit dedicated to accelerating blockchain capacity-building in Africa.
We still have plans that go beyond being a crypto exchange and will be announcing them soon. Our mission remains the same – we want to inspire a movement that enables the emergence of 21st-century Africa through universal access to blockchain technology.”
Mara Spokesperson
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