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Of Patricia and her woes.

by Richard Chilee

Today, I had a lengthy conversation with a friend who invested in Patricia – the Fintech company that has gone under*. During the long call, I realised that he, like many investors,* believes that they will not get their money back. 

Sponsoring Big Brother Naija 2020

When the news came in 2021 that the young company was the frontline sponsor of Big Brother Naija, I became skeptical about how they made their money and possible means of the Return on Investment. I also asked some industry leaders if they believed that the investment was the right one to make considering that the business was still in the inception phase. After the conversations, I knew something was amiss. 

As a growing company, one of the biggest things the owners must do to stay afloat, in the long run, is to conserve funds by all means and avoid overexposure. Spending close to N1B from a business that is yet to have a solid foundation is not a wise move. I also heard the founder invested $1.5M in a fashion retailer, ROOOMXIX.

13,000 User signup in 12 hours

In a 2021 interview, the CEO of Patricia, Fejiro Hanu, said after the Ad ran on Big Brother Naija 2020, there was a huge impact on their user base. The company saw 13,000 sign-ups in 12 hours after the first Ads aired on the popular reality TV show. He added that the new growth was so huge that the company had to upgrade its category in the show in 2021. But what he didn’t understand was that sign-ups do not equate consistency of use. 

1 Million users can sign up for an app today due to excitement. But the biggest focus should always be on the consistency of use. Ask: How many of those sign-ups are consistent users? 

This brings me to another thing I have consistently told my clients. 

Understanding the Principles of Consolidation before Diversification

I strongly believe that every business owner must understand the principles of consolidation before diversification. You must learn to consolidate your main business before diversifying into other businesses. Otherwise, you might lose footing and begin to struggle in the main business which is often the cash cow. 

Looking at what caused the downfall of Patricia, my friend said many things led to the failure of the business. One of which is that the business did many improper diversifications. The founder also lacked a proper accounting system and was not accountable to anyone. Again, he lacked the fundamental skills of running a proper business with a large inflow of funds. He also had the mentality of “I have arrived” and believed that investors’ funds were his. Finally, they failed to work with a good management consulting company for clear-cut directions.

As an entrepreneur, particularly in a business with a high level of cash inflow and transactions, you might be tempted to believe that the company’s money is yours. This is always the foundation of the many problems that many young business owners have. We have seen this happen many times.

Possession does not equate to ownership. 

To avoid mismanagement of investors’ funds, a good founder must have a strong system that pays him a monthly CEO salary and takes care of other business expenses. All his personal expenses must be made from the salary too.

Today, my friend went to Patricia’s office in Lagos and realised that the place was empty. The founder has left Nigeria too. 

I condoled with him and admonished him to be careful next time. 

30 Million Naira has gone down the drain.

Credit: Richard Chilee, author of this opinion, is the Founder of Richard & Malcolm Consulting Company. He is a business consultant, speaker, and leader. This opinion was first published by the author on his Facebook page

Editorial Note

*Investors: CAB is unable to confirm if the “friend” referred in the opinion by the author is a Patricia investor. However, the author himself has admitted, via a follow-up Facebook comment, that the investor is a customer of Patricia (though he also added that his friend was also an “early investor”). In any case, while Patricia may or may not have had a private or public raise, CAB is not aware that Patricia issues any investment products for public subscription other than offering a cryptocurrency exchange platform.

*Has Gone Under: Although Patricia has been experiencing obvious difficulties getting its disgruntled users to access their funds for months now, CAB is unable to confirm that Patricia “has gone under”. Till date, Patricia has been reassuring its users that it is doing all it possibly can to ensure that Patricia is fully operational again and that users are compensated. 

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