Many have commented that OPay did not raise $150 million as I noted in the Gokada piece: “$150 million OPay has raised [$50m for OPay and the reserved $100m].” You are technically correct as the $100 million fund was not specific for OPay.
Yet, these are all semantics. Do not be fixated on it. I go beyond press release in my analysis; I think beyond the press. Since Opera raised $100m for Africa, it has not done anything, at scale, in any other country but Nigeria. I do believe that majority of that $100M is mapped for Nigeria even though it used Africa in the statement. Then, ORide/Opay/OFood got $50M. Nigeria is the only country it is building startups at scale. I don’t really care what they have on press release to make sense of what they are doing. This company wants to build a fintech (OPay) but it needs to acquire customers from different areas to help seed the transaction volumes.
OPay is the operating vehicle as they want to build transaction processing feeders to make their paytech system dominant. I did not say ORide; I said OPay because ORide is under OPay in the grand Opera strategy.
This is a double play strategy: Opera will lose money in transportation, ride-hailing, food delivery, etc but will make money through OPay payment processing fees. So, as it pursues market share challenging Gokada and Max.ng, do not think it is stupid for losing all that money.
Yes, provided the chip business has an internal customer (the mobile device unit, the oasis in my strategy), Samsung will continue to commit resources as the oasis has removed most of the risks in investing billions of dollars to build new factories in the chip business. Yes, the mobile device unit (the oasis) makes the chip business better by being a “reliable customer”, irrespective of whatever happens externally. That is the heart of the one oasis and the center of Double Play Strategy in business.
Most of the comments here have focused that ORide will go bankrupt when its money finishes. The commenters do not know that ORide is structured to provide transaction fees for OPay. Provided ORide does that at scale, Opera will make money via OPay even if ORide is never profitable. Sorry that I have to repeat that again.
I told a firm to adjust strategy last week immediately my Practice came to the conclusion on this OPay strategy. Without a payment system, no ride-hailing startup in Nigeria can challenge ORide headson. Of course, there are other options on what players like Max.ng and Gokada can deploy.
This double play strategy is common. Amazon/AWS uses it. Alibaba/Alipay uses it. And Opera is working on it in Nigeria. If you want to compete against ORide without OPay, you will go bankrupt because ORide may never be designed to be profitable. But the parent company will be fine provided OPay is making money through commissions on transactions.
I browsed through the comments on Gokada and was surprised that our mini-MBA is not yet efficient. ORide will not go bankrupt for giving cheap rides in Nigeria. ORide, OFood, etc are designed to be payment transaction volume feeders into OPay. So, provided they bring volume, even when losing money, Opera will make its money from payment fees. That is the Double Play Strategy: lose money in one thing but make up in another.
For Gokada, Max etc to compete with ORide, they need a Double Play. ORide business model is not to make profit on transport but to feed payment commissions to Opay. One of the best strategies for Gokada and Max will be to buy a fintech firm (I have some suggestions) to compete.
Alibaba/Alipay and Amazon/AWS are examples of double play. Read more on click. Do not be distracted by the discounted rates of ORide/OFood. It will be fine because of its OPay.
1. Register for Tekedia Mini-MBA here (Aug 10 - Dec 3). Four months, online, and costs $140 or N50,000 naira. We also have Certificate courses on logistics, startups, career dev, etc.
2. Read my new book, The Dangote System: Techniques for Building Conglomerates.