On Monday morning, Nigerians rushing to own a part of Dangote’s oil refinery could not access the initial public offering (IPO) as Cowrywise and Bamboo, two of Nigeria’s biggest investment fintechs, struggled under the weight of traffic built up by months of marketing.
Users who tried accessing the IPO took to social media to report problems logging in, slow-loading apps, error messages and difficulty accessing the offer. Bamboo and Cowrywise acknowledged the disruption on X, both saying they were working to restore access to their platforms.
Monday’s disruption showed the gap between the demand the platforms expected and the traffic they ultimately had to absorb. The offer was pitched as the ‘people’s IPO’ to reach ordinary Nigerians through their phones, and the platforms approved to sell it spent months making that case to their customers. Then, on the day, they locked those same customers out of the buzz they had created.
In the week leading up to the IPO, Bamboo opened over 236,000 new accounts, with 64% of the accounts—152,000—funded and trading within the same week, showing the pent-up demand for shares in Dangote’s refinery, the company said in a statement sent to TechCabal. The seven-day figure beat the startup’s best month for signups, May, when 172,000 new accounts signed up.
“We’re genuinely disappointed and sad that we aren’t giving our community the user experience that we’re known for,” a Bamboo spokesperson told TechCabal. “Our engineering team is fixing the platform as we speak. We anticipated a large wave of demand and prepared our systems accordingly over the last 2-3 months, but ultimately that did not happen, and we’re making sure this never happens again.”
While Bamboo races to bring its app back online, Cowrywise told TechCabal its engineering team has restored its app.
“As anticipated, the IPO launch generated a significant surge in traffic today, which resulted in some slower-than-usual response times for about an hour, after which full service was restored,” a Cowrywise spokesperson said. “The offer window for the IPO remains open until October 13, and customers who experienced issues can retry their subscription directly on the app now.”
While it may offer little relief to the users of both platforms, they still have a month to buy shares in the refinery. “In the case of oversubscription, which was highly anticipated, shares will be assigned on a pro rata basis,” Bamboo told TechCabal. “For users who do not receive a full allocation, they will be refunded for the shares that were not received.”
Why the rush?
In September, Dangote Petroleum Refinery announced that Nigerians can participate in its ₦2.15 trillion ($1.6 billion) IPO through a network of approved fintechs, including Bamboo, Cowrywise, Flutterwave, Moniepoint, Paga, PiggyVest and others, alongside banks and mobile-money operators.
The offer opened on September 14, with 4.1 billion shares available at ₦525 ($0.40) each and a minimum subscription of 10 shares. The minimum buy is 10 shares, or ₦5,250 ($4). That low entry price brought a wave of first-time investors through the door on day one.
The IPO is expected to raise money to fund the refinery’s expansion and increase its crude-processing capacity from about 700,000 barrels daily to 1.4 million barrels daily. However, when the offer finally opened, the excitement translated into a sudden surge of traffic.
Cowryrise said it had anticipated significant interest in the IPO and scaled its infrastructure ahead of the launch, but the volume of requests on Monday morning exceeded what it had prepared for.
“We will continue to increase capacity as may be required,” the company told TechCabal. “We’re confident in our capacity to support continued demand through the remainder of the offer period.”
The disruptions raise questions about whether fintechs were adequately prepared for the demand generated by an IPO they had spent weeks promoting to their customers. Bamboo said it had spent the previous two to three months preparing its systems for the expected increase in demand, but the preparations fell short.
The company said it had seen a 350% increase in new users ahead of the IPO and had expected its infrastructure to handle the surge based on how it had performed during previous surges in NGX activity.
“We were optimistic about giving our users a reliable experience based on how our systems handled a surge in new NGX users in the past,” the company told TechCabal. “But ultimately that did not happen, and we’re making sure this never happens again.”
The downtime may not mean investors have missed their chance to buy the shares. Bamboo said IPO shares will not be allocated on a first-come, first-served basis, meaning investors who subscribe later during the offer period will not be disadvantaged.
If the IPO is oversubscribed, shares will be allocated on a pro-rata basis, meaning each investor will receive a portion of the shares they applied for based on the total demand for the offer. Investors who receive fewer shares than they subscribed for will be refunded for the unallocated portion.
“We don’t expect that everyone will want to buy IPO shares today,” Bamboo said. “We expect many investors to buy at the end of the month when they receive salary as well as the end of the IPO on October 13.”
With the offer now open, Nigerians on X are scrambling for alternatives, looking for other approved platforms through which they can subscribe before the October 13 deadline.
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