Pillow, a Singaporean startup that expanded into Nigeria and Ghana, has announced its decision to discontinue its services.
The closure of the startup was attributed to the existing regulatory environment and its influence on the connected financial infrastructure. The startup provided functionalities such as cryptocurrency savings, expenditures, and investments.
Pillow communicated this information to its user base through an in-app message. The message was reportedly sent to over 75,000 individuals from 60 different countries, urging them to withdraw their funds promptly.
In order to streamline the procedure, the company has established a deadline of July 31st, 2023 for users to withdraw their holdings. The app will be removed from the Play Store by that date, and the platform intends to suspend bank withdrawals on July 7th, with cryptocurrency withdrawals to be halted on July 31st 2023.
While the company’s founders, Arindam Roy, Rajath KM, and Kartik Mishra have not made a public announcement about it, the closure signifies the conclusion of Pillow’s objective to offer a solution for individuals in emerging markets to counter inflation.
To support this objective, the startup had successfully raised around $21 million from a total of 15 investors.
Pillow’s decision can be considered a surprising turn of events, especially since just a few months ago, the startup was actively advertising job vacancies. Nonetheless, this situation underscores the significant challenges that crypto startups encounter while navigating regulatory landscapes worldwide.
Nigeria’s Securities Exchange Commission recently said it is considering permitting tokenized coin offerings on licensed digital exchanges that are backed by assets including equity, debt, property but ‘not crypto.’ The regulator said it won’t register crypto exchanges until there’s an agreement on standards with the Central Bank of Nigeria (CBN).
In 2021, CBN ordered commercial lenders not to facilitate crypto transactions, making it difficult for exchanges to operate.
Pillow provided its customers with the opportunity to invest in Bitcoin, stablecoins, and altcoins, offering returns that initially reached up to 18%. The 2-year old startup had managed to raise a total of approximately $21 million, with notable backers including:
- Accel India
- Quona Capital
- Elevation Capital, and
- Jump Crypto
In October of the previous year, Pillow disclosed its $18 million Series A funding.
According to a Techcrunch article, the startup counted India as a major market yet the Reserve Bank of India has been pushing lenders to stop engaging with crypto startups for over a year, making it virtually impossible for Web3 startups to operate in the country.
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