Nigeria’s mobility space is all of a sudden all the rage, as venture-backed startups prepare the go all out to corner the on-demand motorcycle taxi market.
Last month, Ugandan on-demand transport app SafeBoda secured an undisclosed amount of Series B funding from Allianz X, the digital investment unit of international financial services provider Allianz Group.
SafeBoda, which connects passengers with motorcycle taxi drivers while also offering additional financial services, launched in Kenya last year and is now preparing to do the same in Nigeria following the appointment of a country manager.
A Lagos launch would see it enter into competition with Gokada, which has close to 1,000 bikes and completes around 5,000 rides across Lagos’ Mainland each day. Launched in February 2018, Gokada itself raised a US$5.3 million Series A funding round in May, as it plans to expand its driver fleet, increase its daily ride numbers and grow its team.
These well-funded startups are operating in a space that also includes Max.ng, while Norwegian tech company Opera also recently launched its own ORide platform into the market. And while similar competition exists elsewhere, notably in East Africa, the size of the Nigerian market makes it a prize worth particularly fighting for.
A market full of opportunity
Ayodeji Adewunmi cut his teeth in the Nigerian tech space by co-founding successful recruitment startup Jobberman. Now a director at Rise Capital, he became Gokada co-CEO after his company led the recent funding round. He says Nigeria is a market full of opportunity for the startup.
“Lagos alone has a population of 17.5 million people; and the infrastructure deficit that we face is well-known. For decades, two-wheeled transport has been the most efficient, accessible and affordable means of getting around not only Lagos, but our most populous cities. So it goes without saying that there is a significant market opportunity here for us. We’re operating in an estimated billion dollar okada-riding market. Opportunities abound not only in Lagos, but across Nigeria,” Adewunmi said.
“The reason we have gone to the market to raise capital is due to the tremendous demand we have seen in the last 16 months and part of the proceeds is to fix the demand gap.”
Gokada is already established in Lagos, and has even been trailing the potential launch of a sea-based GBOAT service on Twitter this week. SafeBoda would be very much a new entrant, but the startup has already made waves in Uganda and Kenya, and though still pre-launch believes there is huge potential for its platform in Nigeria.
“We are looking to solve a huge problem in Lagos regarding okada safety, as hospitals like Igbobi have been known to be filled with victims of okada accidents. As SafeBoda we feel we can aid in bringing the number of okada accidents down by introducing the SafeBoda way. We see that in Nigeria our solution would have a huge impact,” said Babajide Duroshola, the company’s newly-appointed Nigeria head.
“People want to get to their destinations in a safe and convenient manner so any solution that provides these is always welcome.”
This town is big enough for the both of us
Competition, then, for Gokada, but Adewunmi says this is a good thing.
“It keeps us on our feet and forces us to continue thinking beyond ourselves – pushing us and inspiring innovation in our product offerings and market approach. The core of our work has always been rooted in innovation and we choose to spend time and invest in tailoring our specific product offerings and USPs that will be difficult for others to replicate,” he said.
Gokada believes the Nigerian motorcycle taxi space is an opportunity worth up to US$15 billion, and given this and the size of the Lagos population it is inevitable other ride-hailing companies will enter the market. But Adewunmi believes this market is more than big enough to accommodate other players.
“We are all working towards the goal of making transport easily accessible for Lagosians and providing solutions that work regarding the infrastructure deficit that we face. The local and continental transport sectors are experiencing a boom. We’re proud to be at the forefront of a sector that is changing exponentially and look forward to being a part of its continued evolution. What is most important to us is how we stand out within the market; and without question, we do,” he said.
Duroshola agreed, saying SafeBoda also thinks of things “from a community perspective”.
“Our goal is to build a community of safe riders and safe passengers and reducing the number of okada accidents happening on Nigeria roads. It’s all about safety, safety, and some more safety,” he said.
“The market is very big. That the Lagos market is currently constituted of almost 200,000 okadas shows there is enough room for multiple players.”