'We give up' - Nigerian startup competing with DHL, others shuts down

After two years of operation, DropX, a Nigerian startup that provided businesses and consumers with an app to simplify deliveries, has closed.

Praise Alli-Johnson, co-founder of DropX, announced this in a statement on Linkedin.

Big plans cut short

DropX, founded in 2021 by Alli-Johnson and Oluwatope Liasu, came into the market with big plans to change local delivery in Abuja by providing people and companies with quick, dependable services.

Two years down the line, the startup "got tired." As its user base grew to 2,000, so did its spending on nearly every delivery.

Alli-Johnson said: “I’d say we just give up. We chose to avoid the sunk-cost fallacy. The concept of hyperlocal delivery on demand sounds great, but it demands more than just a great app and technology. All the fancy route optimisation and device tracking can’t overcome actual human factors and infrastructure deficits."

DropX's Surmounting

Challenges Speaking to the challenges that affected business, the co-founder noted that with both bikes and cars on its platform, everyone wanted cheaper deliveries.

According to him, the request for bikes skyrocketed, and requests for cars dropped for subscribers, even for the high-value clients initially attracted to the platform because of cars.

He said: “At this point, bikes weren’t enough, so we are back to the problem of high demand and failed requests. After calling to beg users to try the car option when they can’t find a bike, we decided to find a solution while we throw money at the problem again — we paid drivers the difference.”

After speaking with TVS about supplying its small, reasonably priced, and well-functioning 100cc bikes, the business eventually made headway. The bikes also guaranteed fewer risks of accidents, required less gasoline, and were simple to maintain.

Sadly, Alli-Johnson pointed out that the agreement was terminated when 100cc motorcycles were outlawed in the city due to official legislation.

Off-app deals by drivers

The co-founder also highlighted how some users engaged in off-app deals with drivers, taking cash off the app and hijacking the startup's revenue.

He added: “We found ourselves funding deliveries from our salaries at SendPulse, not generating income. One night at 2 am, I removed the app from the Google Play and Apple Store. We were drowning.”

He also explained how the startup had to pitch to different groups within NIPOST for months for possible collaboration ideas that couldn't come to fruition.

Notably, this comes a few days after Legit.ng reported that Pivo, a Nigerian startup fintech firm, has announced that it is shutting down operations.