Opera, the Chinese owned Internet company, has confirmed that Opay, its Nigeria-based FinTech startup, will be closing down all its businesses in the West African country except for its payments business. It is reported that a memo was sent to the company's employees in Nigeria, excluding those in the payments business, to shut down all operations.
This is a surprising development considering the amount of venture capital funding that the company raised during 2019 while commenting that the startup was "one of the fastest-growing companies in Nigeria, providing consumers with a wide range of services including mobile payments and transfers, ridesharing and food delivery." During November 2019 OPay announced that it had raised $120 million of Series B funding, less than 6 months after it announced its last funding round of $50 million in June 2019.
"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." reads a statement by OPay.
Super App for Nigeria and beyond
During 2018, Opera decided to launch its OPay mobile money platform in Nigeria. The decision seemed to follow-on from the popularity of the Chinese company's low-data Internet search engine across Africa. A year later, the company announced its entry into other verticals including Oride, its bike-hailing platform; Ofood- its on-demand food delivery platform; Ocar- its cab-hailing platform and Oexpress- its logistics platform.
This strategy had any analysts and participants in Nigeria's technology ecosystem waxing lyrical about Opera's Super App strategy and its seriousness about given that it had announced raising a total of $170 million to back up these plans. Furthermore, although initially, all these services were only available in Nigeria, the company had reiterated several times that it planned to roll out its Super App, OPay, across Africa.
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This was further repeated by Derrick Nueman, VP of Investor Relations, and advisor to OPay, who during May 2020 told TechCrunch that OPay is “the glue that holds it all together and within there you can offer all sorts of products.”
Winding down operations in Nigeria
It appears that OPay's troubles could have started when the Lagos State government decided to ban the operating of Okadas, commercial motorcycle hailing, across the state. As a result of this ban, ORide had announced that it is pivoting to logistics, a decision that it has now abandoned.
It is being reported that the company is alrady busy with operations to recover all its ORide Okadas that are in operation in Nigeria.
"OPay will continue to invest in and grow in the eCommerce space, aligning its customer and business eCommerce units which will continue to operate and grow. We believe a financial platform coupled with goods’ platform will form the future of Nigeria's technology development."
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