Nigerian ed-tech startup ScholarX has joined the league of African startups that raise funds to kick-start their businesses. The startup has raised US$100,000 towards an intended US$200,000 pre-seed funding round to launch new products and grow its team.
At A Glance
The startup was launched in Nigeria in 2016. The ScholarX app allows users to select parameters and scroll through lists of available scholarships that match their requirements.
Co-founder and chief executive officer (CEO) of ScholarX, Bola Lawal said this round of funding for ScholarX (US$100,000 of a pre-seed round so far) came mostly from angel investors.
“We are primarily raising for our new model, called SkillsFund, which we are ready to run a full pilot of in July,” he said.
“SkillsFund democratises labour-force reconditioning by providing financing to help new entrants — recent graduates — get up-skilled via verified training partners in in-demand skills and then help place them with local employers seeking fresh talent.”
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The startup said funds raised would also go towards building the startup’s capacity in terms of staff and technology to handle funding, recruitment, and placement of successful students in the program.
“This means that ScholarX will be positioned to actualise its goal of building an ecosystem around education financing for current students and recent graduates. It means that we won’t just stop at providing scholarships but provide additional training opportunities that will directly lead to jobs for the growing youth population,” he said.
ScholarX last rolled out a new product back in 2017 when it launched Village, an education crowdfunding platform that allows African secondary school and university students to create fundraising campaigns for backing by sponsors.
The Nigerian startup took part in the global WISE Accelerator and the Cape Town-based Injini ed-tech incubator last year and was named part of the third Google Launchpad Africa accelerator cohort in March.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Who says giving Nigerian notorious okada riding business model a new repackaged outlook cannot be a viable business model?
Nigerian Lagos-based on-demand motorcycle taxi app Gokada has proven to be up to the game. The startup has just raised US$5.3 million in Series A funding with a plan to expand the number of its motorbikes and available drivers, increase its daily ride numbers as well as grow its team.
Gokada Is Just A Year And Three Months Old
Although Nigerian commercial city, Lagos, has banned motorcycles from plying its major highways, Gokada, defied this rule and formed itself into a more refined business model in February 2018, with a neat, safety-driven business model and more trained drivers.
Customers who need rides in the heavily congested commercial city and the smallest Nigerian state in terms of land mass with a population of 17 million people, can just download Gokada app on their smartphones, or visit Gokada’s website and input their locations and destinations and they would be matched with an available Gokada motorbike. The startup did all that magic in just a year and three months. It secured close to 1,000 bikes and completed around 5,000 rides across Lagos’ Mainland each day, with rides approaching one million in total.
The latest funding is part of the startup’s plan of expanding. Gokada is trying to play a safe game with its highly dangerous business model that demands well-trained drivers.
Govenment’s rule against the use of motorbikes on the highways of Nigeria’s most populous city is so tight. Recently, the Lagos State Task Force on Environmental Sanitation and Special Offences impounded 115 motorcycles, including 22 branded commercial motorcycles, including ‘Gokada’ and its competitor ‘Maxokada’, for violating the state road traffic laws.
The new funding was mostly led by Rise Capital with Adventure Capital, First MidWest Group, IC Global Partners and other several local investors joining. The impact of this round of investment is expected to be felt in the areas of its fleet of drivers, who are sometimes thousands of kilometers away from the location of the hailers.
The startup would also target an increase in the number of its daily rides. At least a 10% increase won’t be bad. In the long run, it is also looking at acquiring more local tech talent who would have to do some jobs about the highly faulty application upon which the startup runs its business. It also intends to explore new verticals for business growth, and provide more value added services to drivers.
Gokada’s biggest competitor is Maxokada which is a bit older, having been founded in 2015, although its initial focus was on-demand delivery where order or packages are delivered in no more than 3 hours. Maxokada may have to fight to retain its market share with its higher pricing model compared to Gokada which is relatively cheaper, although it has better app functionality, and has nearer drivers.
“Our green Gokada motorcycles have become a regular feature of Lagos’ roads in the 14 months since our official launch. Gokada was built with the intention of becoming the future of two-wheel transport in West Africa, and we are fast becoming the go-to platform to hail a motorcycle ride in Lagos. Today’s announcement allows us to accelerate our growth projections significantly, as we continue to grow our market share and look to introduce more product features and services,” said Fahim Saleh, co-founder and co-CEO of Gokada.
The Startup Did Not Take The New Funding For Free Though
With the largest investment from Rise Capital, Mr Ayodeji Adewunmi, director at Rise Capital and the co-founder and former CEO of Jobberman, would be displacing former CEO Deji Oduntan. Adewunmi would be taking over as Gokada’s Co-CEO, a role previously performed by Deji Oduntan.
“It is an incredible time to be joining Gokada on this journey to transform transportation in Nigeria and the rest of Africa. I am truly excited about the promise of Gokada becoming the operating system of how cities function optimally and efficiently across Africa. There is no doubt in my mind that this will become one of the most important companies in Africa,” Adewumni said.
Nazar Yasin, founder and managing partner at Rise Capital, said Gokada’s rapid entry into Lagos’ transport market had been transformative.
“We have noticed that some markets like Nigeria and Indonesia, which both have large populations and inadequate road infrastructure, are more likely to be dominated by motorcycle-hailing companies rather than traditional car-hailing players, and Gokada’s relentless focus on product, customer service, and safety has enabled them to take advantage of this dynamic and produce some truly impressive growth metrics. They are reshaping the tech-enabled transport market in Lagos, and we are excited to be partnering with them as they scale,” he said.
In the meantime, this is a big win for the young Nigerian startup. However, there is still so much work to be done to convince the government that it is worthy to be spared from the long-standing ban against local motorbikes on Lagos’ major roads. This would be a highly defining moment in its next ten years’ future as it looks to build a sustainable business. With high emphasis on safety of both its users and other road users and its appreciably cheap fares, the startup would hope to convince Lagos residents that it is a good alternative to the reforming Lagos transport system and the burning agony of spending several hours on Lagos traffic, in a city that is the smallest in Nigeria and that actually would take about three hours to go round in a mini van with an average speed limit.
According to Nigeria Watch Database, Traffic accidents account for the most fatalities in Nigeria. In 2015, FRSC stated that 5440 people died as a result of car crashes.
(c) Proshare Nigeria, 2017
Charles Rapulu Udoh
Charles Rapulu Udoh, a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.
