Full Text Of CanGo Africa Founder’s Note To Investors On Why The Startup Is Calling It Quits After 6 Years
Earlier this week, word got out that CanGo Africa (formerly SafeMotos) — the mobility/logistics startup that pioneered on-demand motorcycle transport in both Rwanda and DR Congo — had called it quits.
SafeMotos launched in Kigali, the Rwandan capital, back in 2014 and after completing around half a million trips in Africa’s cleanest city, it rebranded as CanGo Africa and expanded to Kinshasa, the capital of DR Congo, after securing just over USD 1 Mn in funding last year.
But for reasons bordering on insufficient capital and the harsh realities of doing business in a hostile-yet-promising market like Central Africa, CanGo Africa has quit both markets and discontinued the business.
In an emailed statement sent to investors and seen by WeeTracker, co-founder, Barrett Nash, explained why he and co-founder, Peter Kariuki, had to make the tough-but-necessary call and close shop.
Here’s the full text of Barrett’s email to the investors of the now-defunct CanGo Africa;
Peter and I have the unfortunate news to share with you that today is the last day of SafeMotos/CanGo operations.
December was an incredible month for us. We reached trip volume of more than 4,000 trips per day, grew by 260% month on month and were achieving the sub metrics on user retention, resilience to increased pricing, low customer acquisition costs and high brand awareness that reaffirmed our deep belief that Kinshasa and Central Africa are ideal markets for a super app.
We achieved traction results since launch that were on par or better to highly successful comparison companies throughout the developing world and did it at a fraction of the unit economic price.
Please see “CanGo Presentation” attached, our last investor talking points.
Unfortunately, we have not been able to find the funds to leverage this success into increased runway for the company. The goal was to close a 1M USD SAFE by the end of 2019 to give us runway for a 3-5M USD Series A in Q2 / Q3 2020. This seemed highly feasible.
We raised 1.1M USD prelaunch last year, while companies like SafeBoda, Opay, GoKada, GoZem, and Max NG have raised seven, eight and nine-figure rounds for African super apps in 2019. However, tectonics in venture capital investing change quickly. While investor enthusiasm and interest has been high, it has not translated to checks being written.
Peter and I have decided that the funds we have committed to the SAFE as of today, 180,000 USD, are not sufficient to bring us to a healthy Series A without an irresponsible risk the investors willing to put that money in.
We have a choice to change strategy: fire everyone and bootstrap with a brand new pivot, or close. We tried the bootstrap strategy in Rwanda: while we achieved positive unit economics, we weren’t able to tell a story of traction to leverage more funds.
Kinshasa is among the most hostile environments on earth, it needs proper capital to make a company successful here. This is not a shoestring environment.
We’ve decided to make the challenging decision to stop while there is still enough money in the bank to pay our employees what we owe them.
We apologize to you all for failing in our mission in making a valuable and disruptive service that reorients the quality of life and access to essential services for the people of Central Africa.
We are proud to be the most successful startup to have ever emerged in the region of Central Africa and we hope our textbook execution and incredible market resonance inspire others to see the region as an opportunity.
While the vehicle of SafeMotos and CanGo is over for Peter and I, we are very lucky in that we both know our mission in the world, we know the existential mountain that we are climbing.
We believe in the very atoms of our beings that the demographic future of the world is African and that this can be a bright future if the people of Africa’s potential is empowered.
We believe that a few lines of code with the right impact can be a scalable way to unlock this bright future for the people of this region. We are hackers, we are driven, we are still going forward. While we leave SafeMotos and CanGo, we will carry on with our personal mission, incorporating the sincerely tough lessons that we have learned.
We thank you all for being on this journey with us, it was the experience of a lifetime. Peter and I feel an incredible amount of pride for what we have accomplished in Kinshasa and Kigali, we hope that you all feel the same for the journey that we have been on together.
Featured Image Courtesy: CanGo Africa