In Nigeria, the e-commerce and last-mile delivery market is projected to be worth more than US$20 billion in the next five years. Ride hailing-turned-logistics platform Gokada IS increasingly carving out its niche, as it grows its share across the country.
The African business environment is one that is many things but predictable. Succeeding in this part of the world requires more than just having a sound business case, it needs grit. Market penetration can be quite tough and laws can change overnight, at times with far reaching implications on your business.
When founding his bike-hailing business in Nigeria, African largest economy, Fahim Saleh just wanted to help Lagosians move around faster and not worry about getting stuck in traffic. This was not his first venture in transport as he had previously founded two startups; Jobike- a Bangladeshi bike sharing platform-, and Pathao, an on-demand ride hailing, and last mile delivery platform also headquartered in Bangladesh.
The business in Nigeria however proved to be nothing like what he had experienced when starting his two other ventures in Bangladesh. “In Nigeria, the model was also different,” Gokada CEO Goel Nikhil tells CEO Business Africa magazine. “If you think of other countries in SouthEast Asia and any other part of the world most of these (ride-hailing platforms) are aggregations, what they do is they only take the bikes that are on the road.”
Nigeria being a unique market required unique solutions if Gokada had to survive its early stages of inception. The technology-only model that worked in SouthEast Asia had to be ditched and Gokada took on a new strategy; that of co-owning the bikes together with the riders, at least at the initial stage. And it was not just bike financing. “We provide all the support they need; we give them the bikes; we give them the training and the App so from that they could go and start making money and from the money they make be charged something as a business.”
8 pilots steer Gokada into successful launch
Under its new operating model, Gokada was able to launch in January 2018, initially starting with about 8 riders which the company proudly refers to as pilots. According to Goel, these riders felt at loss because this was something they had never experienced before. “They didn’t have to walk or have to be paid for a salary because they were working on their own, making money out of it, and only paying Gokada for the resource,” he explains. The pilots did their job well and soon the traffic-laden city of lagos was dotted with Gokada bikes moving time-bound customers from one point to another. “Our riders are our true marketers, they are the ones who are continuously working with us and at the same time giving us insights on how can we keep making things better.” In its 14 months of operation, the startup had secured close to 1,000 bikes and completes around 5,000 rides across Lagos’ Mainland each day, with rides approaching one million in total.
The company was clearly on an upward growth trajectory. A year after its launch, Gokada had moved to a new office in Ilupeju, which housed a state-of-the-art driver training school to train and verify up to 500 riders at a time. Talks with investors also bore fruit leading to a successful series A funding where the startup raised US$5.3 million. The round led by Rise Capital with participation from Adventure Capital, First MidWest Group, IC Global Partners and several local investors, brought in much needed funds to assist Gokada in expanding its fleet of drivers, with the goal of increasing the number of daily rides 10-fold.
The beautiful thing with Africa is when a business opportunity dries up, another one springs up next to it. For Gokada, that opportunity was in last-mile delivery. Last-mile delivery presented a strong business case as most businesses ranging from food vendors to clothes retailers and other consumer goods providers were forced to sell online due to movement restrictions and were in desperate need of a logistics partner. Gokada promptly launched its Gsend services across the city providing a lifeline to SMEs whose businesses were otherwise threatened by lockdown restrictions
“Executing the transition and diversification into last-mile delivery wasn’t easy,” Goel reveals. Riders were only accustomed to carrying passengers, moving goods from one point to another required a whole new training which Gokada was more than happy to provide. According to Goel, it took Gokada more than a year to get its business mojo back but once it took off, business was now booming more than ever. “We were doing more deliveries than we were able to do in the riding business in a day,” he revealed. At the end of the one year, the startup had been able to complete over 2 million food delivery and e-commerce orders on behalf of over 30,000 merchants, restoring confidence that the company was indeed moving towards the right direction.
New Direction under new CEO
While at the middle of implementing its new business strategy, Gokada lost its founder and CEO Fahim Saleh in July 2020. The reigns of leadership were handed to Goel Nikhil first in acting capacity until March 2021 where he was confirmed to be the CEO. Goel first joined Gokada in 2019 and had seen the company rapidly grow, have its wings clipped before reinventing itself as a last mile delivery company. He also brought with him extensive experience in the global last mile logistics space, first in India as General Manager of unicorn food delivery start-up Zomato, and then as Head of New Verticals at SafeBoda in Kenya.
In just 12 months into leadership, Goel proved to be the right person for the job. During this period, Gokada had grown its volume by more than three times, passed US$100 million in annualised transaction value, and had completed over one million food delivery and e-commerce orders. The startup now had new plans to expand beyond its current base in Lagos across multiple cities in Nigeria, including Abuja, Port Harcourt, Ibadan and Ogun.
Before launching into other regions, Goel spearheaded the company’s move towards an integrated transport and logistics company, offering both last-mile delivery and e-commerce company. The company launched a super app in June 2021 to allow customers have to access food delivery, e-commerce, in one place. Through the super app, customers can now have access to thousands of pilots, be able to create easy order management, use API integration to create and cancel orders, estimate delivery charges, and receive status updates straight from their mobile device, as well as select route optimization to reduce delivery costs. The super app, according to Goel, is their plug for anything in their customers daily life from food delivery and e-commerce to logistics services and ride-hailing.
The beautiful thing with Africa is when a business opportunity dries up, another one springs up next to it. For Gokada, that opportunity was in last-mile delivery.
The new super app has also provided a window for Gokada to plot a comeback to its first business venture- ride hailing. This time, Gokada looked at Ibadan, a large city close to Lagos, as its new launch pad. In Ibadan, clients will get to enjoy a full range of services provided by the super app which include food delivery (GFood) and logistics services (GSend), with plans to resume ride-hailing (GRide) and e-commerce (GShop) later in the year. Once the Super App is successfully deployed in Ibadan, Gokada plans to launch further hubs in Abuja, Port Harcourt and Ogun. The aim is to take advantage of Nigeria’s e-commerce and last-mile logistics sector, which is growing at 11 per cent per year, boosted by recent changes in shopper behavior and demand for last-mile delivery.
Making a lasting impact
Having already built a successful last-mile delivery business, Gokada has improved lives of tens of thousands of Nigerians be it riders or owners of small and medium scale enterprises. The company is now on a mission to create a lasting impact in Nigeria. It targets to organically scale its services so that it can triple its impact and reach millions more riders, small business owners, and ordinary citizens trying to beat traffic.
Unlike many companies whose growth ambitions including setting up shop in other countries, Gokada, at the moment, is focused solely on its Nigeria market. That is where it plans to make its impact most felt. “Nigeria is a population of two hundred and ten million, that’s not a small population,” Goel affirms. “If we can go and tap into the market out here properly, we can change the lives of millions of people.”
This feature appeared in the March 2022 edition of CEO Business Africa magazine. You can access the full digital magazine HERE