Gokada, a leading Nigerian last-mile delivery company, has undergone a strategic shift towards an asset-light model to address financial challenges and fuel future growth. This move comes amid ongoing funding efforts, as confirmed by company sources.
Previously reliant on a hire-purchase agreement where drivers bought motorcycles through the company, Gokada faced mounting maintenance costs that threatened its viability. Owning and managing thousands of bikes proved expensive, reaching tens of thousands of dollars monthly in late 2021 and early 2022.
"We had to act," Omotosho stated. "The current model wasn't sustainable, and continuing down that path would have been catastrophic."
The company responded by restructuring the hire-purchase agreement and transferring maintenance responsibility to drivers. This, along with other cost-cutting measures, helped Gokada achieve revenue growth in 2022.
The new asset-light approach involves Gokada connecting drivers needing motorcycles with financing companies, facilitating ownership rather than direct purchase. The company will focus on platform management and payment collection, reducing its financial burden and operational complexity.
This strategic shift aligns with Gokada's ongoing fundraising efforts. Omotosho confirmed discussions with investors for a funding round this year but declined to disclose further details.
But does Gokada need funding?
This question arises given their established presence in the logistics space. One might assume they were aiming for profitability from the outset. However, the answer isn't straightforward.
While Gokada has carved a niche in the Nigerian delivery market, their journey hasn't been smooth sailing. A 2020 two-wheeler ban in Lagos forced a pivot from ride-hailing, impacting revenue and necessitating layoffs. The tragic murder of former CEO Fahim Saleh that same year added further hardship.
Despite past difficulties, Gokada remains optimistic. "We've weathered the storm," Omotosho declared. "While we're not completely out of the woods, this period of resilience has helped us refine our focus. We're confident that this new asset-light model positions us for sustainable growth and success, with or without additional funding."
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