Nigeria's Gokada Files for Bankruptcy Amid Financial Struggles
TLDR
- Gokada, one of Nigeria’s leading last-mile delivery companies, filed for Chapter 11 bankruptcy protection
- The filing allows the eight-year-old company to restructure its $5.2 million liabilities and avoid liquidation
- The bankruptcy follows Gokada’s failed fundraising efforts, including a 2023 campaign to raise $750,000
Gokada, one of Nigeria’s leading last-mile delivery companies, filed for Chapter 11 bankruptcy protection on October 18, 2024, in Delaware. The filing allows the eight-year-old company to restructure its $5.2 million liabilities and avoid liquidation.
The bankruptcy follows Gokada’s failed fundraising efforts, including a 2023 campaign to raise $750,000 at a $10 million valuation. Despite raising $5.3 million in a 2019 Series A round, the company has faced financial challenges, exacerbated by naira depreciation.
Gross revenues in 2024 totaled $118,988, down from $268,779 in 2023. CEO Olutosin Oni, who took the helm in 2022, said profitability remained elusive despite pivots and layoffs. The company owes $1.8 million to its largest creditors and holds assets worth just $560,000.
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Key Takeaways
Gokada’s financial troubles highlight the risks of rapid expansion and the impact of external shocks. Founded as a bike-hailing service, the company pivoted to logistics and food delivery in 2020 after Lagos banned bike-hailing in most localities. The shift included layoffs and an asset-light model, reducing its fleet ownership to 10%. Despite processing $100 million in annualized transactions in 2020, Gokada struggled to maintain cash flow. A failed acquisition by Kwik Logistics earlier in 2024 signaled ongoing challenges. Lead investor Rise Capital’s support couldn’t sustain operations indefinitely. Gokada’s bankruptcy underscores the limitations of cost-cutting as a survival strategy and the importance of scalable revenue growth and reliable funding.
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