Popular Chinese-owned African fintech startup, OPay has confirmed the rumours that it will be shutting down some of its business verticals in Nigeria excluding its payment operation, Opay today.
The other platforms that will be affected include Oride, its bike-hailing platform; Ofood- its on-demand food delivery platform; Ocar- its cab-hailing platform and Oexpress- its logistics platform.
According to the release, Opay attributed the demise of the business verticals to “the harsh business conditions which have affected many Nigerian Companies”, the COVID-19 Pandemic, the Lockdown and the Lagos State Government ban on motorcycles.
According to a report by Nigeria Today, the decision follows a memo sent by OPay’s investors to the Nigerian team yesterday directing all other verticals but payments to shut down operations and all the Chinese expatriate workers to return to China as soon as possible.
The Nigerian team is said to have already set up a team tasked with the recovery of all the ORide motorcycles on the road.
The beginning of the end…
The problem started, for Opay, when the state government of Lagos, Opay’s largest market, crippled the activities of ORide by imposing a ban on activities by motorcycle riders in major parts of the state.
While ORide has made plans to pivot to deliveries, not much progress has been made. Recall that we reported that Opay was seeking a partnership with GIG Logistics to use about 1,000 of its bikes in logistics services.
Ofood, its food delivery arm and Okash, its lending platform and its sports betting payments were also been affected by the general lockdown which has caused a reduction in sporting, food buying and betting activities.
Fast-forward to March 30 and the whole country, just like most parts of the world, was in a lockdown and businesses suffered because of it. Shortly after, we learnt from a source that OPay is selling off its bikes at N180,000.
Opay remains one of the most funded
Opera founded Opay in 2018. The platform started operations in Nigeria with a $50 million funding that was raised in June 2019. The company went ahead to raise $120 million funding from Chinese investors to scale its services in Nigeria and expand into Kenya, Ghana and South Africa.
The first round was led by Sequoia China, IDG Capital, and Source Code Capital. The second round was for $120 million and was backed by investors including Softbank Asia, Meituan-Dianping, Gaorong and Source Code Capital.
Opay has since announced other verticals. These include Oride, Okash, Ofood, Owealth, Omall, Otrade, Olla and Otrike
What next for Opay?
According to its statement, Opay attests to seeing “accelerated growth in its commitment to Nigeria’s financial and technology inclusion”. The company experienced a 44% growth in online and offline transactions by April 2020.
The company promised to “continue to invest in and grow its capacity to play in the e-commerce space as well as continue to align its focus to consumer’s need. “We believe a financial platform coupled with goods’ platform will form the future of Nigeria’s technology development”, it concludes.
This may mean that Opay may intensify its focus on its two recently launched e-commerce service platforms, OMall and OTrade. OTrade is a business-to-business trading platform, allowing merchants to buy directly from wholesalers while OMall is a pure ecommerce marketplace.
The only challenge is that O-Express is a key factor in the success of OMall, in the same way Jumia Logistics is to Jumia’s e-commerce activities. How Opay intends to navigate the absence of its own delivery platform remains to be seen. A possible partnership with other delivery companies may be in the offing.
We wish them all the best.
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