Several accounts linked to African tech companies were restricted by Mercury yesterday.
The number of companies involved is unknown. Well established YC-backed startups and newer upstarts are some of the ones that range from a dozen to 30.
Mercury did not give any prior notice that it would take this action, nor did it explain why the action was taken in its first email to the affected startups, according to our sources.
The account for the company's name has been temporarily restricted. Let us know if you have a question or concern.
Mercury, which holds over 4 billion in customer deposits for its 40,000+ businesses in over 200 countries, told some of the startups that their accounts had been flagged and placed under review after it noticed some unusual activity.
We don't have a definite date for when this will be completed, but we will provide an update as soon as we have one. We will review your account with our bank partner first. We apologize for any hassle this may cause.
The decision by Mercury to block these accounts without a reason has caused a lot of disappointment among tech stakeholders. Mercury's restriction came at an inconvenient time, the end of the month, when major obligations such as salaries and taxes should be attended to, so now those will have to wait.
This is not a good look. I have a list of over 20+ African startups whose bank accounts were mass-blocked at around the same time by @BankMercury yesterday. I love Mercury a lot but they can’t just do this to an entire continent. It is not right & we need to all speak up. https://t.co/vr21Pd9nq4
— Moe is mourning her crocs (@Mochievous) March 1, 2022
Mercury's move might be linked to the ongoing conflict between Russia and Ukraine, which has seen the company's partner bank review its exposure to high risk, according to a couple of founders. Mercury tried to point out that it wasn't for the founder and his business to be held to a different standard in the email sent to him.
It's hard to think that isn't the case, considering how startup from other regions don't seem to have experienced the same problem.
Mercury restricted a large number of African startups’ bank accounts enmasse due to “unusual activity”.
Like that number of accounts. At the same time.
Wild.
— 10X Tech Bro (@OdunEweniyi) March 1, 2022
Mercury is aware that a number of its customers in Africa have their accounts suspended by one of its banks. Some of the bank's customers have been adversely affected by the suspension.
It is our top priority to work with the bank to resolve this matter as quickly as possible. We are reaching out to the customers impacted directly and apologize for the disruption this event has caused.
Immad Akhund reached out via email to those who were affected.
Hi everyone,
I am the CEO of Mercury. Since many of you have emailed/messaged me directly I thought it would be best if I just reached out directly.
We found out yesterday that our partner bank noticed unusual activity and asked us to lock and investigate a large set of accounts with linked activity. We are working through our due diligence on all those accounts and will be in touch with you individually with questions if we have any on your account or activity.
Since it’s a reasonably large set of accounts it’s taking us some time to work through all of them but it’s the highest priority for us internally and we have more than 10 people working on this.
We apologize for this sudden inconvenience and hope to put better practices in place to avoid this in the future. We will be in touch directly as we make progress and feel free to email me on this email if you have follow up questions.
Regards,
Immad
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