SunPay Solutions, a fintech startup with close ties to the Sunshine Investment Group, one of Ethiopia’s biggest conglomerates, had its license revoked by the National Bank of Ethiopia (NBE) for a long list of violations.
The company received a two-month pilot permit for payment system operator and POS operator businesses two years ago and has failed to report its progress ever since.
A letter written by Solomon Damtew, Director of the payment & settlement systems directorate at NBE, and copied to all banks in the country three weeks ago cites six violations that led to the revocation of the license. Failure to appoint a CEO, inability to renew a license, incapability to maintain a physical presence and inability to conduct a shareholders meeting are some of the transgressions to NBE directives, the Commercial Code, and the National Payment System Proclamation which led to actions against Sunpay.
“Your payment system operator license for POS & payment gateway business has been revoked, effective August 27, 2024” reads the letter.
Yonas Samuel, the youngest child of business mogul Samuel Tafesse, was a key figure and significant shareholder in the establishment of the fintech company. Yonas was leading Sunshine Investment Group’s foray into the technology sector with ambitions to also enter the ride-hailing and e-commerce scene.
Sunpay debuted with double the 50-million-birr capital required by NBE and had become the second company to receive the central bank’s greenlight for a payment operator license.
Plans to become a mainstay in the financial technology landscape were announced by the founders during the inaugural shareholder’s meeting held three years ago at the Marriot Executive Apartments.
The ecosystem of technology companies, including the ride-hailing service Sunpick and the merchant delivery company Sundrop, has also collapsed since. The taxi-hailing company even became embroiled in a high-stakes public dispute with industry giant Feres when drivers alleged, they could not install both apps simultaneously.
Feres accused Sunpick of stealing confidential data, driver contact lists, and source code from Feres when it hired a former Feres employee. When Feres drivers installed the Sunpick driver app and registered, their Feres driver app stopped working. Sunpick exited the market nearly a year later.
However, Sunpay seemed to have some early momentum partly due to its capital-intensive entrance, famous backers, and advantages as an early participant. A tokenization business, store-brand cards, thousands of POS machines, and an end-to-end card service were part of the now-frozen company’s early fintech aspirations.
Nonetheless, the once-promising company failed to respond to the NBE’s written request for an explanation of its compliance failures two months before Sunpay’s license was revoked. It has gone through a series of COO’s and management changes.
Yonas says hefty expenses for a salary close to 30 million birr, a data center purchase, and switch expenses stalled the company’s progress. “We expect to be back in between six months to a year,” he told Shega.
Sources close to the matter allege that Yonas’s rapid expansion into multiple sectors, coupled with a lack of proper planning and professionalism, contributed to the company’s demise.
One person, who spoke to Shega on condition of anonymity, characterized the company’s internal dealings as unprofessional. According to the source, high salaries, excessive benefits, and a casual atmosphere ultimately led to the fintech’s downfall.
Samuel Tafesse, founder of the Investment group is widely regarded as the embodiment of self-made riches through a massive real estate and construction portfolio with reported revenues of above 100 million dollars annually.
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The article has been updated to include a response from Yonas Samuel.
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