These Nigerian startups shut down in 2019; what we can learn from them

by | Dec 30, 2019

Behind all the glamour, humongous fundraising figures and flamboyant founder personalities is the reality that running a startup is hard.

Especially so in a business environment like Nigeria where official internet usage figures don’t match user habits and rent-seeking regulatory obstacles are the norm. So it goes without saying that many startups do not survive beyond their first one to five years.

Internet startups that officially shut down in 2019 alone probably numbered in the hundreds. We are certain of these ones.

OyaPay (Dec. 2017 – Feb. 2019)

What it was: A platform for offline businesses to accept payments and take forward orders from their customers with or without a smartphone.

Advertisement

oyapay

Why it was shut down: Very early on, founder and CEO, Abdulhamid Hassan accepted a small seed round from a senior family member.

But when the need for additional investors kicked in, the said family member pushed back on the idea of diluting their investment. This went unresolved for months, leading Hassan to shut down the startup. He has since moved on to co-found another startup.

What we can learn: There are neither friends nor family in business. If you must go into business with friends or family, put everything into legally-bound writing.

Recommended reading

CakeTunes (Sept. 2017 – Jan. 2019)

What it was: An online marketplace where music producers can sell beats to musicians and video firms.

mgm13 e1402863807345

Why it was shut down: Founder and CEO, Ability Elijah published a brutally honest account of why CakeTunes failed.

In summary, “It was all fun until we began to discover hundreds of sites and blogs that were offering quality beats for free. Most of these were even as good as the beats we sold for $100.”

Advertisement

What we can learn: You could have the best startup idea but if there is no demand/product-market fit, you might struggle. Do your research.

Recommended reading

Worthy mentions

These startups don’t quite make the list but they are noteworthy.

DealDey (Mar. 2011 – Dec/Jan 2018/2019)

dealdey dispatch rider

In January 2019, Techpoint officially confirmed that popular daily deals eCommerce site, DealDey had closed shop.

Turns out it had actually shut down in the first week of December, 2018. Which explains why they stopped fulfilling orders in mid-December. What’s more, a follow-up story revealed that DealDey officially died in 2015.

DealDey raised no less than $5m in total funding, over the course of 7 years.

MyPadi (Aug 2016 – May 2019 ???)

TECHPOINT BUILD Event 29 of 271

Techpoint Build 2018 alumnus, EchoVC and Ventures Platform backed hostel booking platform, myPadi held a lot of promise.

But since May 2019, operations appear to have been suspended. Social media activity stopped, phone line switched off and the website is still down, even though founder Joel Amawhe told Techpoint, in September, that it was a database issue that his developer team would look into.

We can’t say for a fact that myPadi has closed shop. But things aren’t looking good for the startup which, in 2018, was estimated to generate annual revenue in excess of $1m.

Additional reading

Have you had to shut down your startup? Do you have insights to share? Email us at startups@techpoint.africa.

Múyìwá Mátùlúkò
Múyìwá Mátùlúkò

Chief Servant. I bully myself because I make me do what I put my mind to.

On January 22, 2022, be part of the largest gathering of innovators, startup founders, thinkers, programmers, policymakers, and investors in West Africa. Register free.

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments

Recent News

Subscribe to Techpoint Digest!

A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day!

Please check your email to confirm your subscription.

Subscribe to Crypto Explorer

A monthly series featuring in-depth analysis on the cryptocurrency sector in Africa

Please check your email to confirm your subscription.

Subscribe to The Experts

A bi-weekly where tech career specialists take us on their journey from newbie to expert, and how they became successful in the industry.

Please check your email to confirm your subscription.

Subscribe to Founder's Table

A monthly series, where we catch up with founders in the startup ecosystem, learn about their failures, successes and a few tricks of the trade

Please check your email to confirm your subscription.

Copy link
Powered by Social Snap