According to regulatory filings in Delaware, Gokada, one of Nigeria’s leading last-mile delivery companies, applied for Chapter 11 bankruptcy protection on October 18, 2024. Chapter 11 allows companies to restructure their debts and establish a plan to repay creditors over time, potentially reducing the amount owed or extending repayment periods, without liquidating assets.
Gokada’s application follows unsuccessful attempts to secure new funding, including a 2023 campaign on the GetEquity platform, where the company sought to raise $750,000 at a $10 million valuation from retail investors. Despite raising $5.3 million in a 2019 Series A funding round, the company has faced financial difficulties. According to its October application, Gokada’s total liabilities amount to $5.2 million, with $1.8 million owed to 20 of its largest creditors, who are not insiders, against assets totaling $560,000, including $64,000 in cash.
As of October 2024, Gokada reported year-to-date gross revenues of $118,988, a decrease from $268,779 in 2023. CEO Olutosin Oni noted that the company remained on the brink of closure throughout 2024 due to the failure to secure the proposed funding. Oni also highlighted the impact of the Nigerian Naira’s depreciation, which has made profitability elusive for the company.
Despite the challenging financial outlook, Gokada is using Chapter 11 provisions to restructure its debts and seek a financial turnaround. The company’s lead investor, Rise Capital, has provided consistent support over the years. However, Oni mentioned that Rise Capital is no longer in a position to independently fund the company to pay off creditors.
Founded by Fahim Saleh and Deji Oduntan, Gokada initially gained recognition as a bike-hailing service, helping commuters navigate Lagos’ traffic. However, the company’s financial challenges began soon after its Series A funding round, with leadership changes and regulatory setbacks contributing to its struggles. In 2020, the Lagos State government banned bike-hailing services in 15 of the city’s 20 local government areas, significantly affecting Gokada and its competitors.
In response to these challenges, Gokada shifted its business model, laying off 70% of its workforce and moving to logistics (Gsend) and food delivery (GShop). By mid-2020, Gokada had processed over $100 million in annualized transaction volume and fulfilled more than 1 million food and e-commerce orders. The company also expanded its services to other cities and adopted an asset-light model, connecting third-party logistics providers to delivery orders instead of maintaining a fleet of motorcycles.
By February 2024, Gokada had fully embraced this model, with only 10% of the 5,000 bikes on its platform owned by the company. However, an attempted acquisition by logistics firm Kwik never materialized, indicating continued challenges. Gokada’s bankruptcy filing underscores the importance of securing sufficient funding or finding strategic partners for survival, as cost-cutting alone cannot guarantee long-term success.
