Compliance outweighs tech in deciding startup asset value during insolvency

Regulatory compliance, not technology, decides whether a failing startup’s assets retain any value, according to a TechCabal analysis published July 12 2026. The article cites the 23andMe bankruptcy, where genetic data could not be sold without privacy clearance, and Kenya’s Data Protection Act, which invalidates broad consent and makes customer databases unusable if consent standards aren’t met. It also notes that digital lenders without a Central Bank of Kenya licence saw loan books worth KES 500 million become unenforceable, and that Koko Networks collapsed after the government denied the Letter of Authorisation needed to sell carbon credits, leaving its cook‑stove hardware and IP worthless. Sendy’s experience shows that being classified as a principal supplier rather than a mere platform can trigger retroactive VAT liabilities that wipe out asset proceeds. The piece warns that founders who scale fast while ignoring data licences, tax structure, credit licences or sovereign approvals destroy the residual liquidation value of their ventures. For African founders and investors, the takeaway is to verify regulatory compliance early—secure data‑privacy consents, obtain required licences, verify tax treatment and secure any needed government authorisations—because without these, even valuable technology or loan books may become unsaleable.

SOURCE: https://techcabal.com/2026/07/13/the-next-wave-the-million-dollar-asset-that-no-one-can-buy/