NopeaRide, Kenya’s first fully electric taxi service, has announced that it would be shutting down its operations in the country after its major shareholder and parent company, Ekorent Oy, based in Finland, declared insolvency.
The company disclosed in a statement that it would be closing down for good due to the insolvent nature of the major shareholder, EkoRent Oy, which launched the service in 2014. The minority shareholder InfraCo Africa Limited has now filed for liquidation of EkoRent Africa Limited in the High Court of Kenya.
The statement reads:
“Following the announcement that our majority shareholder, EkoRent Oy, has declared insolvency in Finland, we are sad to announce that InfraCo Africa Limited, the minority shareholder, has now filed for the liquidation of EkoRent Africa Limited in the High Court of Kenya.”
“This is because EkoRent Oy was the principal financier of EkoRent Africa Limited, and all the technical knowledge on the running of the business lay with EkoRent Oy.”
“We have taken our fleet of electric vehicles off the road and have notified our staff and corporate clients. We are now working with relevant authorities to ensure that our operations are wound up in accordance with local legislation.”
“A mention date has been set for 13th December 2022,” the statement reads.
Although the company had made several strides this year in meeting its target of fleets and previous metrics in 2019 before the pandemic, EkoRent OY went into insolvency in Finland and was unable to secure additional financing to grow the business in Kenya to the next level.
In 2021, NopeaRide announced that it would increase the number of cars in its fleet from 30 to 100 as part of a growth strategy. But by the time it closed shop on Nov. 28, it had only 70 electric cars.
A funding round that NopeaRide hoped would help it reach pre-covid profitability levels failed to materialize.
The story behind NopeaRide’s collapse
NopeaRide service was launched in Kenya in August 2018 (then known as NopiaRide) by the 2014-founded Finnish company EkoRent Oy. Juha Suojanen founded EkoRent Oy in 2014 to develop solutions using electric vehicles.
In Nairobi, Nopea began with a minimally viable product with only three electric vehicles and two chargers. The following year, the company’s fleet and charging network experienced gradual growth.
Nopea built a charging network in Nairobi after raising undisclosed funding in 2019 and placed orders for additional electric vehicles and chargers. Unfortunately, many of the additional vehicles arrived in Nairobi just about the same time when the strict Covid-19 curfew rules were put in place in March 2020.
Although a wrong timing for the fleet of cars which arrived given the new restrictions in place, the company used a good part of 2020 in developing their software further and negotiating for additional equity investment.
Those negotiations finally reached a successful conclusion at the end of 2020 as restrictions gradually slowed down.
2021 was going to be a good year after the company entered into a cooperation agreement with a leading local technology and research university to build a Solar Charging Car Port for Nopea electric vehicles with an option for electric BodaBoda (eBoda) battery swap stations.
Even though the company expanded its fleet of electric vehicles and opened new Nopea charge stations, its traffic never returned to the levels it had before the curfew regulations related to the epidemic were implemented.
Additionally, NopeaRide got €200,000 from EEP Africa, a financing facility for early-stage renewable energy in Southern and East Africa, last year. This infusion helped the company expand its service area in preparation for expansion and establish more solar charging centres in Nairobi.
The startup claimed it was on the road to recovery this year after the COVID outbreak severely hurt sales and caused a decline in rides as more people worked from home.
“In the first half of 2022 our traffic numbers grew to about the same level as before Covid-19. We also started to put more effort in the corporate segment as their employees were returning to office and managed to sign contracts with a few big international companies, some of them potentially reserving the majority of available Nopea capacity.”
However, EkoRent OY went into insolvency in Finland and was unable to secure additional financing to grow the business in Nairobi to the next level.
According to the company’s statement, 70 Nopea electric vehicles have been brought into Kenya since its introduction five years ago. By June 2022, they will have travelled more than 4 million miles and prevented more than 650 tons of CO2 emissions.
The Kenya cab-hailing startup also operated the largest electric vehicle charging network in East Africa.
“We would like to extend our deepest regret to our dedicated team of staff and drivers. We would also like to thank our loyal NopeaRide customers, corporate clients and other partners who have supported NopeaRide’s vision for electric mobility in Africa”, the company says.
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