- A recent report has disclosed that Nigerian fintech startup, OPay, has shut down all of its business operations in the country due to a letter from its foreign investors.
- However, Opay’s official statement contradicts the report, as it indicates that the startup is only putting pausing its ride-hailing and logistics services. Business lines such as Omall, Otrade and other services will continue to operate.
- Opay maintains that it is well-financed and has remained highly profitable.
According to a report, Nigerian fintech startup, OPay has stopped all of its business operations in the country due to a letter from its foreign investors.
The report claims that all the startup’s verticals, including ride-hailing – ORide and OTrike, which were still active outside Lagos; the recently launched B2B and B2C eCommerce platforms – OMall and OTrade; OExpress for logistics; and the food supply service, OFood will be shut down.
It added that all motorcycles that were originally diverted to logistics earlier in the year would be retrieved. However, based on the official statement from Opay, the report appears to not be entirely true.
“We can confirm that some of our business units including the ride-hailing services, ORide, OCar, as well as our logistics service OExpress will be put on pause. This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown, and government ban,” the statement reads.
It goes ahead to mention that verticals such as OMall, OTrade and other services will remain unaffected.
Confirming this in part, a source close to the matter says all OPay businesses have shut down except for OKash and OWallet. Perhaps this clarifies OPay’s comment that it will now focus on delivering financial services.
While insisting that fintech is its main focus, OPay asserts that its mobile money and digital payment services have so far been profitable.
The statement further holds, however, that this restructuring has only a small impact on the profitability of the startup.
To some extent, this recent development confirms the suspicions of a reliable source, shared two months ago, that there will be a new wave of layoffs in the future.
As stated in an OPay counter statement regarding the layoffs, it appears that the startup may not be able to absorb more employees into the remaining lines of business compared to 14 previously available ones.
One thing the company has generally agreed to is the economic effect that the pandemic has had on the firm.
Meanwhile, in an earlier discussion, OPay’s country manager, Iniabasi Akpan, revealed that the concept behind the launch of new lines of business was to increase financial inclusion. However, he stated that the country’s B2B and B2C marketplace is still underdeveloped.
Consequently, it appears that OPay ‘s focus will remain on its payment platform to drive mobile money, lending and investment services while waiting to find its footing on the new eCommerce platform.
Whilst detailing the journey of the Chinese-backed startup since its launch, it becomes clear that the last six months have been quite a rough ride: from Okada and Tricycle ban in its major market – Lagos, to the removal of OKash, its money lending feature from its mobile app due to alleged violation of Google services.
As well as the recent closing of some of its facilities and subsequently the eventual laying off of employees.
The startup, however, maintains that it is heavily financed and has remained highly profitable. It remains to be seen how OPay will perform in the months ahead as it enters its third year of offering services in Nigerian.