Nigerian startup DropX, renowned for its app-based delivery services, has officially announced its closure after a tumultuous two-year run.
The shutdown, amidst a challenging economic climate in 2023, marks another setback in Nigeria’s startup ecosystem.
Founded in 2021 by Praise Alli-Johnson and Oluwatope Liasu, DropX aimed to revolutionize local deliveries in Abuja, connecting businesses and individuals with efficient and dependable services through its digital platform.
Despite a promising start with over 2,000 users and 500 drivers, mostly engaged car owners, the startup grappled with many obstacles that ultimately led to its demise.
One of the core issues stemmed from a disparity between driver payment expectations and customer willingness to pay.
Efforts to adjust pricing strategies and cater exclusively to high-value customers for bulk deliveries and luxury goods did not resolve this fundamental challenge.
Geographical dispersion across Abuja created service availability issues, particularly for users outside specific zones.
Attempts to expand into high-demand areas and recruit additional drivers faced stiff competition from established ride-hailing giants like Bolt and Uber.
Efforts to implement a surge pricing model to meet rising demand were met with user backlash, leading to order cancellations. Incorporating bike deliveries to address high-value clients’ demands further complicated the delivery process.
Despite persistent negotiations, collaboration attempts with the Nigeria Postal Service (NIPOST) to extend bike services through the app proved unsuccessful, adding to the startup’s challenges.
Praise Alli-Johnson, the co-founder of DropX, expressed exhaustion and disillusionment, citing accumulated challenges and unsuccessful strategic partnerships as reasons for the closure, casting doubts on continuing the venture into 2024.
The closure of DropX joins a string of Nigerian startups halting operations, highlighting the immense challenges entrepreneurs face navigating Nigeria’s complex economic landscape.
