Two years after operating in Nigeria, SafeBoda is exiting the market to double down on its largest market, Uganda. According to the company, its Nigerian operations was "unprofitable".
"In its current state [the motorcycle transport industry in Nigeria] is not economically viable and unfortunately requires significant investment at this challenging time in the global economic landscape," the company said in a statement.
According to SafeBoda CEO, Alastair Sussock, "the core unit economics of the okada business [in Nigeria] was very challenging, they were positive, but the margins were too thin."
At the time of this report, the company's Nigerian website is inactive.
The Ugandan-bike-hailing company started operations in Nigeria via Ibadan—a city in the Southwest region, in January 2020. Although many saw it as a wrong move since it did not launch in the country's populous city—Lagos. In February 2020, the Lagos State government announced a regulation that rendered bike-hailing operations obsolete.
In March 2022, Ugandan-bike hailing company, SafeBoda marked its second year with over three million rides made by over 10,000 riders and more than 100,000 passengers in Nigeria. Meanwhile, its logistics vertical completed more than 50,000 deliveries within the same period.
"Uganda generates significant cash flow and is moving quickly to full profitability. The unit value of our services is significantly higher than Nigeria and our brand has deep roots," Alastair Sussock, SafeBoda's CEO, said.
The company launched SafeCar in Ibadan in August 2022.
SafeCar's operations in Nigeria will still continue, per TechCabal. The company is yet to respond to our request for comments on its exit.
Second African market departure within two years
SafeBoda paused its Kenyan operations in November 2020 citing the economic impact of COVID-19 as the reason for the pause. In addition to COVID-19, fierce competition reportedly compelled SafeBoda to make the hard decision of discontinuing operations in Nairobi, Kenya.
While it had a four-year head start in Kampala, Uganda where it first launched in 2015, Safeboda had to compete with Juu boda, Bolt boda and uberBODA in Kenya from the get-go.
Bolt (formerly Taxify) launched its bike-hailing service in Nairobi in March 2018. SafeBoda launched in the green city under the sun in June 2018. And Uber joined the bike-hailing race in November 2018. The Kenyan Boda Boda Safety Association also rolled out its own bike-hailing app called Juu boda to connect its members to more customers in January 2018.
Between January and March 2020, SafeBoda drivers were reportedly cancelling request to protest the low rates customers were enjoying at the expense of their profit margin.
Editor's Note: This is a developing story. It will be updated with more details.