OPay, the Opera-owned fintech firm, has announced that it is pausing some of its O-businesses including ORide, OCar, and OExpress; dealing a huge blow to its super app plans and ambitions.
OPay in a statement shared on its verified Twitter handle said that the pause or shutdown of these services was “largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic the lockdown and government ban.”
OPay said it has already taken ‘preemptive’ steps to cushion the impact of the closure of the aforementioned services.
Apparently, its core financial business is performing more than expected despite the coronavirus pandemic.
“It is important to clarify that ride-hailing had always been only one part and not a major part of OPay’s diversified business in Nigeria. In fact, OPay has been investing more and seeing accelerated growth in its commitment to Nigeria’s financial and technology inclusion.
“During the pandemic, we have seen continued demand for our offline mobile money agency, and online digital payment, which remains the core of our business.
“From January to April 2020 for example, we witnessed a 44% growth of offline and online transaction value even in the midst of the pandemic and lockdown.
“This is a testament to the high demand for flexible and easy financial services by Nigerians, OPay remains one of the most well-funded and profitable mobile money platforms in Nigeria, and we will continue to do more for our customers.”
How Did OPay Get Here?
COVID-19 may have contributed in no small measures to OPay pausing some of its services especially OCar, and OExpress (logistics).
Even OPay said: “Globally, ride-sharing businesses have been heavily impacted by the pandemic. But several months ago, foreseeing this issue.
“OPay had already taken preemptive steps to restructure our business focus away from rides. It is worthy to note that the restructuring has minimal impact on OPay as a whole business.”
However, you do not need a soothsayer to tell you that some of these O-businesses or services will sooner rather than later come to an abrupt halt.
The vibrant business of OPay’s motorcycle ride-hailing business-ORide- took a hit after the Lagos State Government slammed an ultimate ban on Okadas (motorcycles) in the state.
LASG had directed security operatives to embark on total enforcement of the State’s Transport Sector Reform Law of 2018 to immediately address the chaos and disorderliness created by illegal operations of Okada and tricycle riders in restricted areas. They were banned from plying 40 bridges and flyovers across the state.
ORide and the other on-demand motorcycle ride-hailing startups-Gokada and MaxOkada were caught napping as they scrambled to leverage logistics, sell-off their bikes, and expand into other states to serve as buffers against the ban.
Unfortunately, Lagos was their biggest market and no doubt they would struggle to make as much revenue in other states like they did in the centre of excellence.
To make matters worse for the motorcycles startups, COVID-19 came and everything was grounded. Hence, the pausing of ORide.
For OPay, it has not had a good ride with ride-hailing business. Before this, it had shut down its bus-hailing service, OBus.
Regardless, the future of the OPera-owned business is finance and eCommerce (OMall).
It said in the statement: “Lastly, Opay will continue to invest and grow in the eCommerce space, aligning its customer and business eCommerce units which will continue to operate and grow. We believe a financial platform coupled with good’s platform will form the future of Nigeria’s technology development.”
This means OPay will take on Jumia and Konga, the two leading eCommerce businesses in Nigeria.
The question for OPay now is whether or not it has abandoned or jettisoned its super app ambitions…