Glade’s $214,000 Hack: Fintech’s Cybersecurity Warning

Glade, a Techstars-backed fintech startup in Nigeria, has been hit by a massive internal hack that resulted in a loss of $214,000. The breach occurred in 2022 and was perpetrated by a former employee who accessed the company’s backend infrastructure and transferred the funds to an unknown account. The company has reported the incident to the authorities, but the culprit is still on the run.

The hack has exposed the weak security and governance of Glade and other fintech startups in Nigeria, where cyberattacks have become more rampant and sophisticated. In the past year, several financial service providers have been targeted by hackers, losing millions of dollars and compromising customer data. Some of the notable cases include Patricia, a crypto startup that lost $2 million in 2021; Flutterwave, a leading payment platform that was allegedly hacked for $6 million in April 2023; and MoMo Payment Service Bank, a subsidiary of MTN Nigeria that lost $53 million in May 2023.

The hack has also revealed the internal conflict at Glade, founded in 2021 by Liyi Victor and Temitope Hundeyin, who met at Andela, a software engineering company. The startup offers an all-in-one platform for SMEs to manage their finances, including issuing accounts for global transactions, payments, cash flow, and expense management tools. Glade was part of the Techstars Toronto spring program in 2022, where it raised $435,000 on demo day.

According to sources, Glade’s co-founder and CTO, Temitope Hundeyin, left the company after the breach due to disagreements with the CEO, Liyi Victor. Hundeyin claimed that she was sidelined in the running of the business and had no say in decision-making. Liyi denied the allegations and said he fired Hundeyin because the company needed to cut costs and operate more efficiently.

Glade’s hack is a wake-up call for fintech startups in Nigeria and Africa to invest more in cybersecurity and governance. As fintech innovation grows and attracts more customers and investors, so does the risk of cyberattacks and fraud. Fintech startups must adopt best practices and standards to protect their systems, data, and reputation from hackers and rogue employees. They also need to foster a culture of transparency and accountability within their teams and with their stakeholders.

Cybersecurity is not only a technical issue but also a strategic one. Fintech startups need a clear vision and plan for securing their data and assets from internal and external threats. They need a dedicated team or partner to monitor their systems, detect anomalies, and respond quickly to incidents. They need regular audits and reviews of their security policies and procedures. They need to have backup and recovery plans in case of disasters.

Governance is not only a legal issue but also a cultural one. Fintech startups need to have a clear structure and process for making decisions and communicating them to their teams and stakeholders. They need to have clear roles and responsibilities for their employees and partners. They must have clear values and ethics guiding their actions and interactions. They need regular feedback and evaluation mechanisms to measure their performance and impact.

Glade’s hack teaches fintech startups in Nigeria and Africa to take cybersecurity and governance seriously. By doing so, they can prevent losses and damages and enhance their trustworthiness and credibility in the market.