Sylvia Duruson
Early-stage music streaming platform Astrotwig has fallen victim to an apparent investment scam, costing founders and lenders over $20,000. CEO Samuel Adeleke has since resigned over the debacle.
Founded in 2023 by Adeleke alongside Ajibola Disu and Oluwaseun John, Astrotwig blends social features with music streaming. Users can share listening activities, discuss songs, and host online listening parties.
After tweeting about their $500,000 to $1 million pre-seed raise target, Adeleke was supposedly contacted by US-based angel investor Simon Tiwari. Tiwari offered their full ask of $1 million as a convertible loan after allegedly seeing Astrotwig present at an industry event.
As part of standard due diligence and documentation, both sides agreed to first transmit a Bitcoin test transaction of $20,000 as collateral. This precursor would ostensibly unlock the full $1 million tranche.
Astrotwig pooled loans from friends and family to fulfill the prerequisite. However, upon scanning Tiwari’s provided QR code, over $19,000 was immediately deducted from their crypto wallet, far above the agreed $20 test amount.
It dawned on company leaders that this had all the hallmarks of an elaborate scam. Tiwari had insisted funds be moved to anonymity-centric wallet platform Mycelium under the auspices of preferred investment channels. This allowed him to provide a rigged address that drained nearly all deposited coins.
The incident’s public nature has forced accountability. Adeleke has resigned from Astrotwig amidst the embarrassment, with an interim CEO expected to be announced shortly. Police reports have also been filed regarding the scam.
Astrotwig is now left picking up the pieces. Having taken on debt to finance the $20,000 scam transaction, the startup has been forced to launch an emergency crowdfunding campaign. So far they have raised about 15% of targeted funds as lenders threaten legal action.
While the company showed initial traction and vision, this failed investment puts Astrotwig’s very existence in doubt. Its small team must now rebuild trust and capital in a difficult climate for early-stage African startups.
The lessons here echo previous warnings around crypto’s risks for young companies. But Astrotwig also fell prey to simpler human manipulation that catches even seasoned operators. As Nigeria’s startup ecosystem matures, such experiences will ideally brew sharper diligence and self-preservation instincts all around.
