In accordance with regulatory filings in Delaware, Gokada, considered one of Nigeria’s most distinguished last-mile supply firms, filed for Chapter 11 chapter protection in October 18, 2024. Chapter 11 permits an organisation to work out a plan to repay collectors over time, decreasing the quantity owed or extending the reimbursement interval. This fashion, the corporate doesn’t should liquidate its property to pay money owed.
Gokada’s chapter 11 submitting follows unsuccessful efforts to lift new funding, together with a 2023 marketing campaign on GetEquity, the place it tried to lift $750,000 at a $10 million valuation from retail buyers.
Regardless of elevating $5.3 million in a 2019 Sequence A spherical, Gokada has struggled financially. Per its October submitting, the corporate’s complete liabilities are $5.2 million—it owes $1.8 million to twenty of its largest collectors who are usually not insiders— on property price $560,000 ($64,000 in money.)
In October 2024, Gokada acknowledged that its gross revenues year-to-date had been $118,988, decrease than the $268,779 it reported in 2023.
“Because of not closing the proposed funding, Gokada has remained on the point of shutting down for the whole lot of 2024,” Olutosin Oni, the CEO of the eight-year-old firm, wrote to buyers in an electronic mail seen by TechCabal.
Oni, named CEO in 2022, famous that naira depreciation made profitability elusive.
“Vital effort and time has been put into making Gokada worthwhile through the years sadly with the extreme decline within the worth of the Nigerian Naira, we have now not but reached that purpose,” Oni informed buyers within the electronic mail seen by TechCabal.
Gokada and Oni declined to touch upon any a part of this story.
Regardless of the grim outlook, Gokada is just not giving up. The corporate will use Chapter 11 provisions to restructure its money owed and try a monetary turnaround.
Whereas the corporate has been in vital debt for years, its lead investor, Rise Capital, has been supportive. In accordance with Oni, Rise Capital has been “keen to fund the corporate independently as a way to repay Gokada’s collectors and hold it operational. Sadly, they’re not capable of single-handedly shoulder the financial burden.”
October’s chapter submitting marks the newest chapter in a journey of restructuring and pivoting. Based by Fahim Saleh and Deji Oduntan, Gokada gained traction as a bike-hailing service, serving to commuters navigate the infamous Lagos visitors jams. By 2019, the corporate had accomplished about 1 million journeys and raised $5.3 million in Sequence A elevate funding.
The corporate’s monetary troubles seem to have begun shortly after saying its Sequence A elevate. Deji Oduntan resigned as CEO and was changed by Saleh and Ayodeji Adewunmi, who additionally left the corporate in 2019. Tosin Oni grew to become CEO in 2022.
Past the management upheavals, the Lagos state authorities added to Gokada’s troubles in early 2020 after it banned bike-hailing startups from working in 15 of town’s 20 native authorities areas. It was a serious blow to Gokada and a number of other bike-hailing startups.
Within the face of those setbacks, Gokada tailored. It laid off 70% of its workers and pivoted to logistics (Gsend) and meals supply (GShop). In accordance with Oni, the layoffs had been a response to a harsh macroeconomic setting, with the corporate prioritising effectivity because it navigated destructive money move.
By June 2020, Gokada was reportedly processing over $100 million in annualised transaction worth and fulfilled over 1 million meals and e-commerce supply orders for 30,000 retailers on its platform. It additionally expanded its ride-hailing companies to Abuja, Port Harcourt, Ibadan, and Ogun State, the place business bikes weren’t banned.
The enterprise mannequin continued to evolve. It went from proudly owning a fleet of bikes to an asset-light mannequin, connecting third-party logistics suppliers with supply orders on its platform. The shift was meant to chop prices, decreasing the monetary burden of sustaining a fleet of pricey bikes.
By February 2024, Gokada had absolutely embraced this asset-light strategy, proudly owning solely 10% of the 5,000 bikes on its platform. But, experiences of an acquisition by logistics agency Kwik, which by no means materialised, urged the enterprise nonetheless struggled.
GoKada’s chapter submitting highlights a vital lesson within the enterprise world that reducing prices alone can’t assure survival. GoKada faces the daunting activity of elevating funding or discovering an acquisition companion to outlive.