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A SA startup which hit the headlines earlier this year for having raised one of the biggest equity crowdfunding rounds in South Africa, has had to give back over R25-million of the raise because the money that investors pledged was suspect.

In May, SA regtech startup Intergreatme announced that it had raised over R32.6-million in a campaign run on local equity crowdfunding campaign Uprise.Africa.

The startup which was founded in 2016 by James Lawson,Dewald Thiart and Luke Warner (pictured above) has an identity management platform which provides users with control of their identities across financial services, telecommunications and insurance.

At the time, Uprise.Africa CEO Tabassum Qadir called the raise a record for African crowdfunding. The investment in exchange for a 20% share in the startup (see this story).

But that has now been caste in doubt.

Intergreatmes Dewald Thiart said he couldnt confirm or deny whether the withdrawn R25m, was linked to politically exposed individuals

An email from Intergreatme (that Ventureburn has a copy of) sent to investors on 30 September, informed those that took part in the raise that the startup would only be accepting R6-million, because the source of the funds from five pledges failed the platforms compliance process.

Read the email:

Please be advised that one group which made five substantial pledges have failed our Compliance Process.

Acknowledging that some investors have been motivated to invest by hearing of the amazing R32-million received in pledges, you are reminded that, should you be having second thoughts you are welcome to withdraw your investment prior to subscribing for shares. Should you elect to do this, your funds will be returned to you, timing being subject to Uprises confirmation of compliance with due diligence procedures.

In light of the above the Intergreatme board has resolved to accept R6,000,000.00 (Six Million Rand) of the funds pledged in terms of the Crowd Funding Campaign/Primary Offering and is considering either, raising the balance through a secondary offering/listing on ZAR X or through private investors at a higher valuation, read the letter.

While Intergreatmes CEO Luke Warner wasnt immediately available, Thiart referred all questions about the campaign to Uprise.Africa, adding that as the platform has the FSCA license,

From a legal stance we were advised that Uprise.Africa would be dealing with that, he said.

When asked whether he could confirm whether the over R25-million that was withdrawn, was linked to politically exposed individuals, Thiart said: I cannot confirm or deny that.

Contacted by Ventureburn Uprise. Africa CEO Tabbassum Qadir confirmed that the startup was only going to take R6-million and that the platform had opted not to accept the remaining amount because from investors because it had failed to meet FICA compliance.

Qadir explained only that the source of over R25-million in funds that were turned down wasnt clear, adding that the platform had therefore taken a decision not to accept it.

That money was rejected, said Qadir. We cannot jeopardise out platform, she added.

She said the plan is to now raise the balance of the R25-million via a listing on the ZAR X platform.

The equity crowdfunding platform signed a deal earlier this year with ZAR X, which would allow investments raised on the crowdfunding platform to list as shares on ZAR X, where they can be traded with other investors (see this story).

She expects the listing to take place in February or March. It would follow the listing of the R6-million that has been approved by Uprise.Africa. This would allow the 300 investors whose R6-million it is, to sell their share to other investors, if they so wanted to, said Qadir.

Qadir is confident that ZAR X listing will be able to net the remaining R25-million, or more and points out that taking into account amounts that were pledged after the Intergreatme campaign closed on Uprise.Africa, the platform received pledges totaling over R60-million for the startups offering.

Meanwhile a question mark hangs over a second Uprise.Africa raise.

In September it emerged that Uprise.Africs was conducting due diligence on investment offers from four investors to fund My Name is Reeva,a new documentary series on the life of Reeva Steenkamp, who was murdered in 2013 by athlete Oscar Pistorius (see this story).

This, after Warren Batchelor, the films director and co-producer and Tony Miguel, the films co-producer in launched an equity crowdfunding campaign on the platform in August to raise R40-million in return for a 50% stake in the film (see this story).

When asked by Ventureburn last week what had become of the campaign, Qadir said the campaign was never opened to the public, after the producers were able to raise R20-million from local investors.

Explained Qadir: They (the producers) didnt want to open it to the crowd, because of the public concern.

When asked what concern this was, she explained that Oscars family can bring a legal order or whatever.

She said the producers are taking legal advice on whether they can match the R20-million from investors sourced via a campaign on Uprise.Africa or whether the other R20-million must come from another investor, outside of the platform.

Read more: Uprise.Africa mulling offers from four investors for R40m Reeva documentary campaignRead more:Uprise.Africa launches R40m Reeva Steenkamp documentary crowdfunding campaignRead more: How we raised R29m in seven days via crowdfunding Intergreatme man [Q&A] [Updated]Read more:SAs Intergreatme sets Africa crowdfunding record with over R28m raised in just daysRead more:SA regtech Intergreatme out to raise R24m through crowdfunding site Uprise.Africa

Featured image: Intergreatme CEO and co-founder Luke Warner (Facebook)

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EXCLUSIVE: Intergreatme's over R32m crowdfund - reduced to R6m after 'suspect pledges' - Ventureburn