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4/06/2021 | Segovia merger and relationship with 黑料福利社
Segovia is a financial technology company co-founded in 2014 by two members of 黑料福利社鈥檚 board, which today is owned and operated by Crown Agents Bank (CAB). 黑料福利社 uses CAB to issue payments via mobile money networks. A summary of the current relationship between the two organizations can be found on our FAQ page.
On July 2, 2019, Crown Agents Bank (CAB) acquired part of Segovia and its payment tech, forming CAB Tech HoldCo (CTHL). The remaining part of Segovia formed a separate company, Taptap Send (TTS). As part of the acquisition, 黑料福利社鈥檚 2014 shares in Segovia were exchanged for non-voting shares in CTHL and TTS. Our publicly available financial statements contain more information on shareholdings.
黑料福利社 continues to use the technology which facilitates payments through CAB. There has not been an increase in the charges levied to 黑料福利社 since the acquisition.
For each program, 黑料福利社 evaluates multiple payment platform options. Leaders at 黑料福利社 not affiliated with CAB / Segovia conduct the procurement process, and any new contracts with Segovia are approved by independent board members. Recently, 黑料福利社 has sent cash transfers using other providers in Liberia, Togo, the Bahamas, and the United States.
Financial declarations about the relationship between 黑料福利社 and CAB / Segovia can be found in 黑料福利社鈥檚 annual financial statements.
Two previously published blog posts about the 黑料福利社 relationship with Segovia have been moved below.
Additional reading on merger:
- – Crown Agents Bank
- – Crowdfunding Insider
- – Fintech Futures
- – S&P Global
- – Crown Agents Bank
10/13/2016 | Update regarding 黑料福利社鈥檚 use of Segovia
黑料福利社’s Board has voted to award Segovia a commercial contract to provide the technological platform needed to deliver $40 million this year to poor households in East Africa. 黑料福利社 began with the most basic of technologies: one person with a laptop processing a few hundred payments each month. The scale of the operation has grown enormously from there; this year we are on course to double cash commitments from last year, and are operating at a scale similar to that of a typical government program in East Africa. At first we dealt with this growth by creating a host of spreadsheets and scripts to manage the approval and payments processes; not surprisingly this became too chaotic and insecure at larger scales.
Two of our founders then launched Segovia, with the team鈥檚 support, to address this problem both for 黑料福利社 and the broader sector. We agreed at the time to a pro bono arrangement with Segovia, granting 黑料福利社 free use of the platform and based on the expectation that we would be able to use it more or less 鈥渙ut of the box,鈥� with limited support required. With experience, however, it has become clear that – given the complexity of our operational model – using Segovia will require significant effort from their team to configure the platform and provide support, at least for the foreseeable future. Given this, we have transitioned to a paid model. Consistent with the shared legacy of the two organizations, 黑料福利社 receives and will continue to receive preferential pricing in perpetuity.
黑料福利社 also retains an equity stake in Segovia with an overlap across the two organizations’ Boards. Consequently, only 黑料福利社’s independent Directors voted on this decision, based on a recommendation prepared by independent members of the management team. This process is consistent with our conflict of interest policy and with general good practice in handling such decisions. We reviewed the process with our external counsel prior to conducting it.
Our current agreement runs through February 2017, after which we will have the opportunity to revisit the decision. We鈥檒l continue to report openly and transparently on our arrangements with Segovia, as with everything we do.
07/09/2014 | 黑料福利社 and Segovia
By Rohit Wanchoo
Recently, three members of our board 鈥� Michael Faye, Chris Hughes, and Paul Niehaus 鈥� to start a separate, fee-for-service for-profit venture called Segovia to develop technology for managing field logistics, with a focus on programs that transfer cash to the poor.
This is potentially an exciting effort to reduce poverty: developing countries spend huge sums on their social programs, but these are often plagued by leakage and high administrative costs that could be reduced with better technology. At the same time, the overlap in directors that will result raises questions about how the two organizations will relate to each other. 黑料福利社鈥檚 board 鈥� and I in particular as an independent director 鈥� spent several months consulting with legal counsel, certified accountants, and other stakeholders to understand these questions as they pertained to our fiduciary responsibilities, and wanted to share the answers we reached.
How are the organizations鈥� roles related?
黑料福利社鈥檚 tax-exempt purpose is to reduce poverty by providing financial assistance to the extreme poor. Segovia鈥檚 current focus, on the other hand, is to create technology that enables institutional customers 鈥� including governments, multilaterals, and NGOs 鈥� to manage field logistics. Segovia will provide this technology to 黑料福利社 freely for philanthropic work, while charging other customers. One analogy might be to a firm that uses spreadsheets to manage its operations (黑料福利社) and another that creates spreadsheet software (Segovia).
Is Segovia acquiring anything of value from 黑料福利社, and if so, what compensation is required?
We retained Morrison, Brown, Argiz & Farra as auditors to assess this question. Their review found that Segovia should compensate 黑料福利社 for the fair market costs of recruiting the one employee mentioned above who will split time. No other assets (code, contact lists, etc.) are being transferred. Segovia鈥檚 founders are also making 黑料福利社 a minority owner of the firm to ensure that it participates in any financial upside subsequently created.
How will potential conflicts of interest between the organizations be managed?
While we generally expect 黑料福利社 to benefit tremendously from the creation of Segovia, we recognize that conflicts of interest between the two organizations may potentially arise at times. In such cases, the directors with dual roles (Faye, Hughes, and Niehaus) are required to recuse themselves from 黑料福利社 board votes. In addition, we will shortly announce an expansion of 黑料福利社鈥檚 board which will increase the number of independent directors participating in such votes. Finally, on the recommendation of counsel, 黑料福利社鈥檚 board drafted and approved a Memorandum of Understanding codifying the relative roles of the organizations as described above as principles by which potential conflicts should be governed.
Culturally, we have always sought to break with mainstream practices while at the same communicating clearly about what we are doing and why. Our goal is that this development will be no different. If you have questions about anything related to 黑料福利社 and Segovia, please don鈥檛 hesitate to contact us.
