OPay also continues to operate ORide for limited passenger service — though the company is shifting the motorcycle ride-hail operation toward logistics businesses.
These were some of the updates offered by Opera’s Derrick Nueman, a VP of Investor Relations and advisor to OPay.
This is playing out in the context of fierce competition among fintech and mobility companies in the West African country. Nigeria is home to the continent’s largest economy, biggest population and is the top destination for VC to African startups, as of 2019.
Opera launched the OPay mobile money platform in Lagos in 2018 on the popularity of its internet search engine in Africa. A year later, the Norway-based, Chinese-owned company sent jitters through Nigeria’s startup world when it rallied investors to back OPay with $170 million in VC. The financing haul amounted to nearly one-fifth of all venture funding raised for African startups the previous year.
Opera tapped this capital to go to work building a large suite of internet-based commercial products in Nigeria using OPay as the financial utility.
In a 2019 prospectus, Opera referred to this multi-product strategy as creating “Africa’s super app.” Pursuing that platform put OPay in competition with dozens of local startups — such as payment firm Paga and logistics venture Max.ng — without deep pocketed corporate parents.
Opera remains committed to the super app strategy, according to Derrick Nueman. He referred to OPay as “the glue that holds it all together and within there you can offer all sorts of products.”
Nueman compared the approach to other multi-service internet services models such as Grab or Gojek.
“It’s taking what has worked in Asia and ascribing it to Africa and that, to my knowledge, is still the plan,” he said.
Opera has tested a number of service verticals in Nigeria. So many it’s been a bit difficult to keep track. A few — such as OBus — have already been jettisoned. Nueman confirmed a list of five current product offerings around Opay in Nigeria:
- OMall, a B2C e-commerce app.
- OTrade, a B2B e-commerce platform.
- OExpress, a logistics delivery service.
- OFood, for restaurant delivery.
- ORide, a motorcycle ride-hail service.
On ORide in particular, there’s been some speculation the motorcycle ride-hail service will continue, particularly after the Nigeria’s Lagos State severely restricted two-wheeled, on-demand passenger services early this year. Nigerian outlet TechCabal reported this week ORide was selling off some of its fleet.
According to Opera’s Derrick Nueman, ORide still offers limited ride-hail taxi service. “On the passenger side, it continues to operate where it can.” Many motorcycles are being transitioned to other functions within OPay. “What they’ve done is redirected a bunch of their drivers to do things like delivery and logistics,” said Nueman.
Opera still plans on taking its super app model on the road in Africa, according to Nueman. “OPay continues to look into other markets. The idea is to take what’s worked in Nigeria and export it,” he said.
In a 2019 release, Opera named Ghana, South Africa and Kenya as potential growth markets.
On timing for expansion, Nueman said it depends on obtaining proper licenses and then gauging shifting variables related to COVID-19 in Africa.
The economic impact of the pandemic has cast uncertainty over the continent’s largest economies and tech hubs — such as Nigeria, Kenya, South Africa — where lockdown measures have restricted startup revenues and operations.
On OPay’s plans to weather a stormy economic environment in its primary market, Opera’s Nueman points to the company’s VC coffers.
“At a high level, if you don’t need capital, or you’re well-funded, you’re ahead of the game,” he said.
Nueman also highlighted the growth of OPay’s payment volume. “Between January and April…the offline and online transaction volume increased by 44%. So even in the lockdown, it’s doing really well.”
Where does this put Opera’s Africa venture in Nigeria’s competitive startup landscape? Traction with payment volume is obviously a good sign for the company. Still, recession and restricted movement could make business as difficult for OPay in Nigeria as its competitors.
Having more capital — and ability to endure a higher burn-rate — places OPay in a strong position vis-a-vis other startups. But it will take more time to determine if OPay can align its super app products to local consumer preferences as well (or better) than offerings by local tech companies.
As has been proven in other markets, all the VC in the world won’t necessarily buy product market fit.