Operas Africa Fintech Startup OPay remains committed to building a multi-service super app in Nigeria as the basis for expansion on the continent.
OPay continues to operate ORide for limited passenger service – although the company is shifting motorcycle hailing to logistics companies.
These were some of the updates offered by Derrick Nueman of Opera, VP of Investor Relations and advisor to OPay.
He spoke to theinformationsuperhighway Amidst a flood of recent reports that questioned OPay's Nigeria strategy and speculated about the move away from certain industries.
This takes place in the context of fierce competition between fintech and mobility companies in the West African country. Nigeria is home to the largest economy and largest population on the continent and, from 2019, the main destination for VC for African startups.
Opera launched the OPay mobile money platform in Lagos in 2018 due to the popularity of its internet search engine in Africa. A year later, the Norwegian-owned Chinese-owned company sent jitter through Nigeria's startup world when it brought investors together to support OPay with $ 170 million VC. Financing expenses amounted to almost a fifth of all risk financing obtained in the previous year for African startups.
Opera used its capital to build a large suite of internet-based commercial products in Nigeria and use OPay as a financial services provider.
In a prospectus for 2019, Opera described this multi-product strategy as "Africa's super app". By tracking this platform, OPay competed with dozens of local startups – such as the payment company Paga and the logistics company Max.ng – without deep-pocketed business parents.
According to Derrick Nueman, Opera remains committed to the super app strategy. He called OPay "the adhesive that holds everything together and in which you can offer all kinds of products".
Nueman compared the approach to other multi-service Internet service models such as Grab or Gojek.
"It's about taking what worked in Asia and attributing it to Africa, and as far as I know, that's still the plan," he said.
Opera has tested a number of service industries in Nigeria. So many that it was a little difficult to keep track. Some – like OBus – have already been dropped. Nueman confirmed a list of five current Opay products in Nigeria:
- OMall, a B2C e-commerce app
- OTrade, a B2B e-commerce platform
- OExpress, a logistics delivery service
- OFood, for restaurant delivery; and
- ORide, a motorcycle hail service
OPay – whose Nigerian country manager is Iniabasi Akpan – also starts selling devices with Olla, a cell phone line preinstalled with their apps.
There has been some speculation on ORide in particular that motorcycle hail will continue, especially after the Nigerian state of Lagos severely restricted two-wheeled on-demand passenger service earlier this year. The Nigerian outlet TechCabal reported this week that ORide is selling part of its fleet.
According to Derrick Nueman from Opera, ORide still offers a limited hail taxi service. "On the passenger side, it continues to work where it can." Many motorcycles are switched to other functions within OPay. "What they did is redirect a group of their drivers to do things like delivery and logistics," said Nueman.
Several ORide competitors – such as .ng and Gokada – have also shifted from passenger transit to delivery logistics in response to official restrictions on motorcycle taxis.
According to Nueman, Opera continues to plan to launch its super-app model in Africa. “OPay continues to explore other markets. The idea is to export what worked in Nigeria, ”he said.
In a 2019 release, Opera named Ghana, South Africa and Kenya as potential growth markets.
At the time of the expansion, Nueman said it depended on getting the right licenses and then measuring the changing variables related to COVID-19 in Africa.
The economic effects of the global pandemic have unsettled the continent's largest economies and technology centers – such as Nigeria, Kenya and South Africa – where blocking measures have restricted startups' earnings and operations.
According to several sources, Nigeria is already in another recession due to the slowdown in economic activity and the decline in global oil demand.
Regarding OPay's plans to weather a stormy economic environment in the primary market, Nueman from Opera refers to the company's VC tills.
"At a high level, you are ahead of the game when you don't need capital or are well funded," he said.
Nueman also highlighted the growth in OPay's payment volume. “Between January and April… the offline and online transaction volume increased by 44%. So it works very well even in lockdown. "
Where does Opera's Africa company come from in Nigeria's competitive startup landscape? The traction with the payment volume is obviously a good sign for the company. Still, recession and restricted mobility could make OPay's business in Nigeria as difficult as its competitors.
With more capital and the ability to endure a higher burn rate, OPay is in a strong position against other startups. However, it will take longer to determine whether OPay can (or better) align its super-app products with local customer preferences than what local technology companies offer.
As has been proven in other markets, not all VCs in the world necessarily buy products that are suitable for the market.