Nigerian mobility startup Gokada is facing mounting financial challenges as court documents reveal that the company owes Nigerian creditors more than any other group amid its Chapter 11 bankruptcy proceedings in Delaware, United States. The startup, which filed for bankruptcy in October last year after an unsuccessful crowdfunding campaign on GetEquity, now finds itself grappling with over $5 million in liabilities.
Gokada’s financial distress sheds light on the precarious situation faced by many African startups that seek to expand under challenging macroeconomic conditions. According to documents seen by Launch Base Africa, eight of Gokada’s 20 listed creditors are Nigerian firms, including Lagos-based Virari Capital Investments, The Alternative Bank, S One Investments Ltd, and Outpost Investments Limited. One Nigerian investor alone is reportedly owed more than $200,000. Other creditors hail from Mauritius, the United States, Singapore, and the United Arab Emirates.
The filings indicate that Gokada has only $64,000 in cash left at the now-defunct Silicon Valley Bank, along with an additional $500,000 in various investments, including government and corporate bonds. However, these funds may not be sufficient to settle outstanding debts, particularly after paying secured creditors, who collectively are owed $150,000. Notably, all Nigerian investments in the company are unsecured, raising concerns about the potential loss of these funds as bankruptcy proceedings unfold.
Gokada disclosed that it generated $268,779 in gross revenue from its Nigerian operations in 2023, with earnings dropping to just over $100,000 in 2024 before the company sought bankruptcy protection. The firm’s CEO, Olutosin Oni, who leads the company alongside Seun Omotosho, has stated in legal filings to the court that Gokada has not engaged in fraudulent activities or concealed assets — offenses that could carry severe penalties, including a $500,000 fine or up to 20 years in prison.
The company’s shareholder structure remains largely intact, with Adventure Capital LLC, founded by Gokada’s late CEO Fahim Saleh, holding the largest stake at 31%. Rise Capital III LP owns 21%, while Gokada Friends and Family LLC controls 10%, with the remaining shares distributed among various investors.
Court Proceedings and the Role of a Subchapter V Trustee
The Delaware Bankruptcy Court proceedings involving Gokada recently took a significant turn with the appointment of Subchapter V Trustee David Klauder, following a motion by U.S. Trustee McCollum Hannah. Under Subchapter V bankruptcy, designed for small businesses, trustees are appointed in cases of potential mismanagement or compliance issues. While the debtor typically retains control under Chapter 11, the trustee’s involvement signals a shift in oversight, ensuring creditor interests are protected and compliance with court directives is maintained.
Founded by Fahim Saleh and Deji Oduntan, Gokada initially gained traction as a bike-hailing service helping Lagos commuters navigate the city’s traffic congestion. By 2019, the startup had completed over one million trips and raised $5.3 million in Series A funding. However, financial turbulence began soon after, with a series of leadership changes disrupting operations. Oduntan resigned as CEO, and Saleh briefly took over before appointing Ayodeji Adewunmi, who also departed in 2019. By 2022, Tosin Oni had assumed leadership.
A pivotal moment came in early 2020 when the Lagos State government banned commercial motorcycles from operating in 15 of the city’s 20 local government areas. The decision dealt a significant blow to Gokada and other bike-hailing services, forcing the company to pivot toward logistics (Gsend) and food delivery (GShop). This shift led to a 70% workforce reduction as the company attempted to streamline operations.
Despite these challenges, Gokada reported processing over $100 million in annualized transaction value by mid-2020, fulfilling more than one million delivery orders for 30,000 merchants. The company later expanded its ride-hailing services to Abuja, Port Harcourt, Ibadan, and Ogun State, where commercial motorcycles were still permitted. Additionally, Gokada transitioned to an asset-light model, connecting third-party logistics providers to its platform rather than maintaining its own fleet. By February 2024, only 10% of the 5,000 bikes operating on its platform were company-owned.
Reports of a potential acquisition by logistics firm Kwik in early 2024 did not materialize, further signaling the company’s financial instability. Gokada’s bankruptcy filing underscores a key business lesson — cost-cutting alone is not enough to ensure survival. The company must now either secure fresh funding or find an acquisition partner to sustain its operations.
Gokada’s struggles have been further punctuated by the tragic 2020 murder of its founder, Fahim Saleh. In a case that shocked the global tech community, Saleh was brutally killed by his former personal assistant, Tyrese Haspil, in a crime motivated by financial disputes. Haspil was sentenced to 40 years to life for the murder last year, which exposed deeper issues of financial mismanagement and betrayal.
As Gokada navigates its bankruptcy proceedings in the Delaware court, its fate remains uncertain. The coming months will determine whether the company can restructure and emerge from its financial difficulties or join the growing list of African startups unable to withstand market and regulatory pressures.