Pioneer electric vehicle taxi service in Kenya, NopeaRride, “unplugged for good” in November 2022.
It operated the largest electric vehicle charging network in Africa, and was on the up and up again in the first half of this year, having significantly grown its traffic numbers to almost pre-COVID-19 levels.
Unfortunately, its majority shareholder and principal financier, Finnish EkoRent OY, went into insolvency and could not secure additional funding to grow NopeaRide as expected.
This caused its minority shareholder, Infraco Africa Limited, to file for liquidation of EkoRent Africa Limited.
NopeaRide, sadly, gives proof to this famous statement hinged on research: “90% of start-ups fail within their first five years.”
The electric vehicle taxi service launched into the Kenyan market in 2018; four years after the Finnish company, EkoRent OY, was created to develop solutions based on electric vehicles and solar energy.
At the time of releasing a formal press statement of its closure (see it here), NopeaRide had imported 70 electric vehicles that had driven over four million kilometres halfway through 2022, and saved over 650 tons of CO2 emissions; a commendable feat for the start-up which grew its fleet from only three vehicles and two charging points.
While it is an unfortunate turn of events for both companies—EkoRent OY and EkoRent Africa, some lessons can prove valuable to its owners as well as founders who might entertain the idea of going down the same route.
Spread the risk: Every founder knows that starting and running a business can be risky. It will not be wrong to write that NopeaRide did, in fact, put “all its eggs in one basket.” In EkoRent OY’s basket. In other words, they did not spread the risk of the start-up’s success; rather it all hinged on one entity–their major stakeholder and parent firm.
So when the Finnish company went under, it was inevitable that NopeaRide would go down with it. Imagine if the start-up had other financial backers to lean on when the insolvency announcement broke.
Look for opportunities in challenges: The COVID-19 pandemic was a global catastrophe. It affected many, many, many businesses with the requisite lockdowns and restricted movement regulations enforced by each country around the world.
No one saw it coming or the consequences of its spread until it occurred. It was almost like an act of God- unpredictable and devastating.
On the one hand, it grounded several business operations to a halt, most especially hard hit were those in the transportation industry – vehicles, cruises, airlines.
With this suspend mode, some businesses dug deeper into their creative side to fashion out ways to work around the aftermath of COVID-19.
Kudos to NopeaRide for using most of 2020 to develop its software further and negotiate for additional equity investment. But could it have done more and probably survived? Adapted its software and charging points for other uses besides the function for which they were initially designed? Viewed NopeaRide as some companies did—that COVID-19 might be here for longer than anticipated—and moulded the company around it?
The pandemic wreaked as much havoc as it created an abundance of opportunities.
View as a learning experience: Granted, NopeaRide has closed its doors to the public, but the entire business model ought to serve as a learning curve for its owners and other entrepreneurs; and not a defeating one.
“Accepting that failures are part of having a growth mindset is the starting point,” says Sindhu Kutty of Kuroshio Consulting
It is no secret that founders will fail several times on the way to their dreams of success. And these failures will help their companies evolve while at it. Failure is a necessary part of learning in any activity; from learning to walk to creating a business empire.
Start-ups fail all the time. There’s research to back it up. However, learning from failure and putting the lessons into the next venture is what counts.
Let the experience tackle priorities, develop innovative ideas and approaches to breaking down obstacles and, most importantly, foster continuous and inexpensive learning curves.
Failing is a part of growth.
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