Gokada, one of Nigeria’s most prominent last-mile delivery companies, filed for Chapter 11 bankruptcy protection on October 18, 2024, according to regulatory filings in Delaware. Chapter 11 allows businesses to reorganize their debts, repay creditors over time, and avoid asset liquidation, offering a chance to stabilize operations.
The filing followed failed attempts to secure new funding, including a 2023 campaign on GetEquity that sought to raise $750,000 at a $10 million valuation. Despite raising $5.3 million in a Series A round in 2019, Gokada faced significant financial challenges, reporting total liabilities of $5.2 million—$1.8 million owed to its 20 largest non-insider creditors—against assets worth only $560,000, including $64,000 in cash. The company’s revenues also dropped sharply, with $118,988 reported in 2024 compared to $268,779 in 2023.
The CEO Olutosin Oni attributed the company’s prolonged struggles to naira depreciation, which he said made achieving profitability nearly impossible. “Significant time and effort has been put into making Gokada profitable, but the severe decline in the value of the Nigerian Naira has hindered this goal,” Oni wrote, adding that the company had been on the brink of closure throughout 2024.
Oni, who became CEO in 2022, has been at the forefront of Gokada’s attempts to navigate its financial crisis but acknowledged the uphill battle in securing stability. Gokada and its leadership declined to comment further on the situation.
Despite its challenges, Gokada remains determined to turn its fortunes around. The company plans to leverage Chapter 11 provisions to restructure its debts and pursue a financial recovery.
While Gokada has struggled with mounting debt for years, its lead investor, Rise Capital, has shown consistent support. According to CEO Olutosin Oni, Rise Capital had been “willing to fund the company independently to pay off creditors and keep it operational.” However, they can no longer sustain the financial burden alone.
The October bankruptcy filing marks another chapter in Gokada’s tumultuous journey. Founded by Fahim Saleh and Deji Oduntan, the company initially gained traction as a bike-hailing service, helping Lagos commuters navigate the city’s infamous traffic. By 2019, Gokada had completed 1 million trips and raised $5.3 million in a Series A round.
However, financial troubles surfaced soon after. Oduntan resigned as CEO, with Saleh and Ayodeji Adewunmi stepping in briefly before Tosin Oni took over in 2022. Compounding its struggles, the Lagos State government’s 2020 ban on bike-hailing in 15 of the city’s 20 local government areas dealt a significant blow to Gokada and other startups in the sector.
Despite these setbacks, Gokada remains committed to finding a path forward, even as it faces the challenges of debt, leadership transitions, and regulatory hurdles.
In response to mounting challenges, Gokada pivoted its business model and streamlined operations. The company laid off 70% of its staff and shifted its focus to logistics (Gsend) and food delivery (GShop), with CEO Olutosin Oni citing the harsh macroeconomic environment as a driver for these changes. By prioritizing efficiency amid negative cash flow, Gokada aimed to stabilize its operations.
By mid-2020, the company processed over $100 million in annualized transaction value, completing more than 1 million food and e-commerce delivery orders for 30,000 merchants. It also expanded ride-hailing services to Abuja, Port Harcourt, Ibadan, and Ogun State—areas unaffected by Lagos’ commercial bike ban.
As part of its cost-cutting strategy, Gokada transitioned to an asset-light model, moving from owning motorcycles to connecting third-party logistics providers with delivery orders. By February 2024, only 10% of the 5,000 bikes on its platform were company-owned, significantly reducing operational costs.
Despite these adaptations, Gokada’s financial struggles persisted. Reports of a potential acquisition by logistics firm Kwik, which never materialized, hinted at ongoing difficulties. The bankruptcy filing underscores a critical reality: while cutting costs is essential, it alone cannot ensure a company’s survival. Gokada now faces the uphill battle of securing funding or finding an acquisition partner to remain in operation.
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