The closure of CanGo, a pioneer tech company in ride-hailing, has raised concerns over lack of funds to boost startups.
CanGo, a tech firm that was founded in Kigali in 2014 recently announced it closed shop, citing insufficient funds to continue its on demand delivery business The company had expanded to DR Congo and Kenya.
The firm, which initially focused on safe moto rides in Kigali, said in a note to investors seen by Rwanda Today that it did not raise enough funds. Barret Nash, co-founder of CanGO told Rwanda Today that he and co-founder are now seeking ways to revive the business.
“While CanGo has ceased operations, we are still actively looking for partners who can work with us to unlock the super app for Central Africa.”
The tech company had abandoned ride-hailing business in Kigali to focus on delivering various parcels and food on motorcycles around Kigali. In addition, it rolled out ride-hailing app in Kinshasa, DR Congo. On demand delivery customers in Rwanda made orders through WhatsApp.
“Unfortunately, Central Africa (Rwanda and DR Congo) proved to be a tough place for CanGo to raise money,” Mr Nash told Rwanda Today.
According to Mr Nash, Central Africa only accounts for two per cent of the venture capital in Africa and CanGo was aware from day one that raising funds was going to be a hurdle.
“My assumption was that if we attained a successful enough launch and showed the viability of the DRC market we would be able to raise additional funding, but unfortunately it was not the case,” he added.
In Kigali, the com-pany’s on demand delivery services appeared to have been stable as the firm had planned to launch an app to replace WhatsApp as orders were increasing. However, Kigali and Nairobi were both affected by the funds gap.
“CanGo's Kigali operation was doing excellent. We had been piloting new services in Kigali before bringing them into Kinshasa and we were pushing the boundaries of innovation in East Africa with our order 'whatever you want via WhatsApp' system,” noted Mr Nash
Unfortunately, the same funding gap that halted operations of CanGo in Kinshasa also halted Kigali.”
The company tried to change its strategy in Rwanda but it was not able to leverage more funds.
“We have a choice to change strategy: Fire everyone and bootstrap with a brand new pivot, or close.
We tried the bootstrap strategy in Rwanda. While we achieved positive unit economics, we weren’t able to tell a story of traction to leverage more funds," read part of the note to investors.