Opera-backed Nigeria-based fintech startup, OPay, has confirmed to WeeTracker that it is suspending some of its business units in the country due to harsh business conditions.
Osagie Alonge, Director of Marketing at OPay, made this known today. As a matter of fact, OPay is suspending its e-hailing services — ORide and OCar — as well as its logistics business, OExpress.
The decision to hit pause on those business units has something to do with the unfavourable conditions created by the well-documented Okada ban, the global pandemic, and the ensuing lockdown.
OPay has since issued an official statement explaining that the decision to halt its e-hailing and logistics units was a necessary one given that it had previously foreseen the constraints and had moved to restructure into a payments-focused business.
In February this year, the Lagos State Government outlawed commercial motorcycles in key areas and bike-hailing startups were not spared. Such startups generally moved into micro logistics and explored other locations.
OPay, which had its bike-hailing division, ORide, heavily invested in Lagos was significantly impacted. Before things went south, ORide claimed to have completed 10 million rides since launching in May 2019. But the Okada ban changed things and OPay reportedly even had to sell off some of its bikes.
OPay now says it is going to focus on its growing mobile money agent service in Nigeria which it claims grew 44 percent between January and April 2020. The company reiterates that financial services have always been its most valuable business unit and the verticals being shut down only accounted for a small portion of its business.
Last month, OPay’s Country Manager, Iniabasi Akpan, made rather bold claims that the company now has 300,000 agents across Nigeria while accounting for 60 percent of mobile money transactions in the country.
OPay also says it is going to pursue growth in its newly-launched e-commerce verticals, OMall and OTrade. Oddly, no information was given on the fate of its online food delivery unit, OFood.
Backed by up to USD 170 Mn in venture capital, OPay had embarked on an aggressive growth quest when it rolled several business units last year — including ORide, OBus, OCar, OTrike, OKash, OWealth, OFood, OLists, and few others – all available on the OPay app which claims 5 million users.
This was thought to be part of a broader plan to roll out a super app, not unlike WeChat in China. But those plans seem to have hit a snag since the turn of the year.
In May, we reported on the company’s struggles — there had been a flurry of exits coupled with business losses. As it is, it does seem like the company has chosen to do a readjustment as it looks to carve out a new path for its lofty fintech ambitions.