We’re less than 6 months into 2018, but by now, some new startups have already veered off the straight-and-narrow. While complete shutdowns by companies are not strange, the reality is no less jarring for everyone affected.
So why do startups fail? Well, three things that could easily contribute to business failure are:
Now, here’s a list of Nigerian startups that have closed up shop in recent times and why.
Efritin.com
The classified ads platform recently shut down its operations, barely 16 months after it was founded. The founder and CEO of Saltside Technologies, Nils Hammar disclosed that it was due to the platform’s inability to generate the desired returns on investment (ROI). Hammar added that the high cost of Internet and data and internet also informed theplatform’s decision to scale back on its investments in Nigeria.
Olx
This popular platform for classified ads announced that it was shutting down its operations in Nigeria and other African countries, barely 3 years after its entry into the Nigerian market. The company which is owned by South Africa’s media giant, Naspers shut down its operations due to the difficult operating environments.
Konga
Konga was one of Nigeria’s biggest e-commerce players. However, 2 months after laying off over 60% of its workforce, the embattled e-commerce platform announced in February 2018 that it had been acquired by Zinox, a local tech firm which manufactures and distributes computers and manages data center infrastructure. Sources say the company’s exit was due to high cost of doing business in Nigeria.
Showroom.ng
The showroom platform started with the lofty goal of making millionaires of up to 100,000 Nigerian carpenters. Carpenters were to display their works and get connected to customers also shut down. But after 12 years of trying without success to scale its operations, CEO, Sheriff Shittu, announced in 2016 that it was shutting down.
Easy Taxi
Easy Taxi began in brazil but was one of the first Rocket Internet companies to launch in Africa in 2013. Despite an additional funding of over $10million from Rocket International for its expansion into Asia and Africa, the news of its exit from the African market still shocked many. The company packed up when its Nigerian co-founder, Bankole Cardoso, stepped down in April 2016.
GoMyWay
It wasn’t up to 2 years into its operations, when this ride sharing platform announced that it would be bowing out of the business. Investors came to a conclusion to shut down operations because of lack of resources to run the business. But perhaps, the real reason would have been that the platform was reduced to a place for introductions as users tend to take transactions off the platform after contact.
Camplus
The startup which was founded by David Edet in 2016, was aimed at connecting students and student entrepreneurs across Africa through e-commerce. It had a promising start and made more than N4 million in sales revenue in just a month after launch. But according its founder, Camplus’s shut down was due to recession prices and the high cost of running business in Nigeria.
