Nine months after launch, Hytch shuts down following failed fundraising attempt
Nigerian logistics startup, Hytch has shut down barely nine months after it commenced operations with a ride-hailing offering, then fulfilment.
Nigerian logistics startup, Hytch has shut down barely nine months after it commenced operations. "It has been a tough one but we are shutting down operations finally," the company stated in a social media post on Feb. 2, 2023. "We would no longer be providing our services to businesses or individuals."
In 2021, Laolu Onifade co-founded Hytch with Oluwafemi Omoniyi (CTO) due to his "frustration by the outrageous amount of money [he] spends on Uber and Bolt", the company started out to solve expensive transportation. However, two months after connecting car owners with passengers recording at least 25 rides daily, Hytch pivoted to a B2B logistics company helping small businesses in Lagos and Abuja.
Until the shutdown, the company worked with Nigerian healthtech Famasi, Wicreate, and Smileys. This pivot as well as the shutdown has been attributed to the lack of funding amidst the global economic downturn. "We couldn’t raise and couldn’t sustain the business with just the money we were making," Onifade was cited by TechCabal.
In 2021, we listed Hytch as one of the alternatives to Uber and Bolt in Nigeria.
Onifade maintains that Hytch was a good business. "We built the traction. We had good traction and processed thousands of deliveries, but we couldn’t close out the round. In fact, we were already building something no one was doing, without any operational cost," he told Benjamindada.com. Meanwhile, he declined to comment on some of the challenges the company faced during its existence.
Three months ago, the product designer said that "[Hytch] have found a product market fit in powering the delivery infrastructure that more and more businesses can rely on".
These businesses will have to make do with Hytch's competitors who are better funded and still operate in the fulfilment space. In March 2022, a Lagos-based company that provides logistics services to B2B merchants, from social vendors to e-commerce platforms, Kwik raised $2 million in a Series A round. Another startup in the sector, Rise.NG secured a $150k pre-seed and Shapshap got a seed extension from GreenTec Capital Partner—the Abuja-based company also won an $8,000 cash prize at GITEX 2022.
The company's pivot from ride-hailing to fulfilment services can be seen as a strategy to attract funding, however, the challenges in the space abound especially in the midst of little or no funding. In August, Hytch said it was in the process of raising its pre-seed and after raising a family-and-friends round.
Recently, Kenyan logistics company, Sendy said it would no longer consign goods within Nigeria. "We have decided to cease on-the-ground operations and focus instead on getting the right product," Sendy Nigeria General Manager, Daniel Edeimu, said. This decision came a few months after the company deactivated one of its products, Sendy Supply to double down on Sendy Fulfillment, an e-commerce platform that enables businesses to distribute their products.