OPay has announced that it will shut down some of its business units, including its ride-hailing (ORide, OCar) and logistics (OExpress) services, to focus more on Nigerian financial and technology services.
In a statement on Thursday, July 2nd, 2020, the company said the decision to shut down some business units is due to harsh business conditions caused by the COVID-19 pandemic, the lockdown, and government ban on motorcycles.
In February 2020, the Lagos state government imposed a ban on motorcycle and tricycle operations (excluding delivery services) in key commercial and residential areas within the state.
“We can confirm that some of our business units including the ride-hailing services ORide, OCar as well as our logistics service OExpress will be put on pause,” the statement read.
“This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown, and government. Verticals like OMall, OTrade, and other services remain unaffected.
Attesting to this in part, a source close to the matter said all OPay businesses have shut down except for OKash and OWallet.
Perhaps, this explains OPay’s comment that it will now focus on rendering only financial services.
While insisting that its main focus is fintech, OPay claims that its mobile money and digital payment services have been profitable so far. However, the statement further maintains that this restructuring has only a little influence on the startup’s profitability.
To an extent, this recent development confirms a reliable source’s suspicions two months ago that there is a new wave of layoffs in the offing.
As maintained in a counterstatement by OPay concerning the layoffs, it seems the startup may not be able to absorb more employees into the limited verticals remaining, compared to 14 that were previously available.
“Several months ago, foreseeing this issue, OPay had already taken pre-emptive steps to restructure our business focus away from rides. It is worthy to note that this final restructuring has minimal impact on OPay as a whole business.”
It said the ride-hailing unit is not a major part of its business units adding that it 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 pandemic and lockdown.”
“This is a testament to the high demand for flexible and easy financial services by Nigerians.”
OPay expressed hopes that the fintech part of its business coupled with goods’ platform will form the future of Nigeria’s technology development.