Gokada Raised $5.3 million Before Going Into Cockroach Mode – CEO Fahim Saleh
Two-year-old startup, Gokada is going into ‘cockroach’ mode as the company’s CEO Fahim Saleh announces major layoffs in the wake of ‘okada’ ban in Lagos state Nigeria.
Launched in January 2018, the startup was founded by Fahim Saleh to solve Nigeria’s largest city traffic problems. Since then, Gokada has gone on to raise a total of $5.6 million from two rounds and claims to have completed more than a million rides.
A year and a few months later after launch, it was reported that Deji Oduntan stepped down from his CEO role as co-founder Fahim Saleh took over. At the time, there were allegations of mismanagement and misconduct at the startup which Saleh denied during an interview with Techpoint.
According to a source; “When Fahim got the money, he used a bulk of it to buy over 2,000 bikes where each bike cost about $1500 without factoring the cost of helmet, trackers, Bluetooth, shipping and custom fees. Multiplied by 2,000 bikes, that’s a bulk of the fundraising. Having spent a bulk of the fundraising, they don’t have enough funds in the bank. “Secondly, they couldn’t onboard enough riders and because of that, they were already in a financial crisis by December as they struggled to pay salary. Then they secretly laid off some staff. But immediately they heard the news of the okada ban, they sacked close to 70% of the staff.
Gokada founder and CEO, Fahim Saleh, confirmed the layoffs but refuted the financial crisis claims. He said in a tweet to Techpoint that, “while much of your report is accurate, we still have money in the bank and are pivoting towards deliveries while this transport ban gets sorted. We were due to make a profit in January before the ban was announced.”
“Before the ban, Gokada was making more than ₦3 million daily from our drivers. Now, we need to plan for the worst. Our workforce was set up for a transport oriented service and we don’t know the potential challenges in the delivery business. In order to have maximal chances of success, we need to go into ‘cockroach’ mode,” Saleh says.