In a landmark deal for Nigeria’s tech ecosystem, fintech startup Risevest has acquired digital trading startup Chaka, TechCabal has learned. Tosin Osinbodu, Chaka’s founder and Eke Urum, the founder of Risevest, confirmed the deal was concluded and approved on Tuesday morning.
“We’re excited, especially from the perspective of people; high level and strategically, this deal makes sense,” said Osinbodu. “I’m excited about how Chaka’s product will evolve and how we’re going to learn from the Risevest team.”
While both companies declined to comment on the transaction’s cost, they told TechCabal that Chaka and RiseVest will remain separate products. Per Eke, while Chaka’s ownership and cap table will get updated, “everything else remains; the team stays the same.” Both companies will continue to work on their product roadmaps and collaborate to improve products. According to Eke, deals like this are essential to Nigeria’s tech ecosystem and present an opportunity for collaboration.
Why the Acquisition Makes Sense
One person familiar with the matter said that both companies hold complimentary licences, providing a glimpse into why the acquisition was perfect for RiseVest. Eke and Osinbodu declined to comment. Founded in 2019, Chaka calls itself an “investment passport” for users. With the Chaka app, users can buy shares of publicly traded companies in Nigeria and the United States for as little as $2. Users can also buy fractional shares, reducing the cost of entry to investing.
Chaka has had an interesting existence and faced an existential scare in December 2020 when the Security and Exchange Commission (SEC) banned the company from operating and advertising to customers in Nigeria. The SEC said Chaka did not have a licence for the service it was promoting. Yet after engagement with the regulator, Chaka became the first trading startup to receive a digital sub-broker licence in March 2021.
The Future of Chaka and RiseVest
Eke told TechCabal that a mutual investor first suggested the idea of a deal to him early in the year. Informal talks began in March 2023; Tosin and Eke shared that they got along quickly and joked about how they could have been cofounders in a different life.
“The first conversation we had about this was: this is where Chaka is trying to go; I wonder if this could happen. Investors on both sides have also always been aware. To my knowledge, all investors bought in when we spoke to them about this deal.”
“Knowing how much we have put in, the investors understand that we’re committed to it. I think the investors are really glad about this outcome and what the future holds,” Osinbodu concluded.