With a population of 211.4 million people and ailing road networks, the motorcycle-hailing business in Nigeria seemed to have a lot of potential. However, the trend of shutdowns of motorcycle-hailing businesses in the country suggests otherwise.
In 2020, there was a rise in the number of motorcycle-hailing businesses in Nigeria, precisely its commercial centre – Lagos. It started as a highly competitive space until the Lagos state government banned motorcycles from major routes in the state. Key players like ORide, Max Ng, and Gokada had to stop providing this service.
One such player, SafeBoda skipped the challenge of the ban in Lagos as it did not launch in the country’s most populous city. Reports hold that it had a scale in the western state of Ibadan. In just over a year since its operation, the startup has surpassed one million rides, growing at an impressive 150%. In just 11 months, it had tripled its traction to three million completed rides, solidifying its dominance in the state.
So Why is SafeBoda Leaving Nigeria?
The sharp turn of events for a seemingly thriving motorcycle-hailing brand doesn’t look good on this side of the ride-hailing business in Nigeria.
In a press statement, SafeBoda said that “in its current state is not economically viable and unfortunately requires significant investment at this challenging time in the global economic landscape.”
SafeBoda announced car-hailing pilots in Kampala only two months ago. Olaoluwa Arokoyu, SafeBoda’s Nigerian country manager, told TechCabal at the time, “The product is already going through a series of iterations in Uganda, and when it’s done, we’d run a quick one in Nigeria and launch.”
The motorcycle-hailing company has secured an undisclosed sum of additional funding from Yamaha Motor Company and existing investors, including Unbound, Allianz X, and JAM Fund, to support the company’s path to profitability. This new funding, according to the company, will help it deepen its core transportation offering while steadily building its payments and financial services in Uganda.
“In Nigeria, the core unit economics of the okada business were very challenging, they were positive, but the margins were too thin,” SafeBoda CEO Alastair Sussock told TechCabal.
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