Exclusive: How WeMove grew 7x in the middle of the Covid-19 pandemic
WeMove CEO and co-founder, Celestine Ezeokoye, spoke to the DadaBen Blog in an exclusive tell-all about how the company went from a slump to experiencing geometric growth in a pandemic year.
As 2019 drew to an end, the WeMove team sat for what would be a crucial meeting. Business had been unimpressive as the company had failed to meet its target. The strategy needed to change for the coming year. The company would avoid distractions like the media and focus on what was important — getting results!
How WeMove Started
Led by Celestine Ezeokoye, WeMove raised $30,000 in 2018 from Lydia Idem of FM Capital Group and Gbenga Agboola, CEO of Flutterwave, to start the business. It was a modest investment by all standards, but the team was determined to make it work.
By the end of 2018, the total revenue was $33,000. Again, this was a modest figure by all accounts. But at least, it signalled positive growth and the potential to do more.
The challenges of the transportation and logistics industry in Nigeria are well documented. From poor infrastructure to unstable government policies, everything conspires to make the sector a tricky one to navigate, especially for the uninitiated.
However, the prize of conquering it is also a juicy one. Africa's third-party logistics industry was worth $27 billion as of 2018. Celestine and his team want a piece of that still-expanding pie.
The goal at the end of 2018 was to earn an ambitious 5x in revenue following year and every year after. However, 2019 wasn't to be that year.
WeMove's Gross Booking Value (GBV) grew from $285,000 in 2018 to $11.7 million in 2019. However, revenue for 2019 was only $40,000 — far from the 5x goal the company had set.
WeMove calculates GBV based on the value of inquiries and requests that come during the year, regardless of whether they are fulfilled or not. The metric is important because it informs the company on the size of the market and the scope of what is possible if it optimises its processes.
The meagre growth in revenue despite a rise in bookings signalled to Celestine and his co-founders that they were not optimising. Hence the all-important meeting.
Changing Strategy
At the 2019 meeting, the team analysed the numbers. Where are the orders coming from, and why are they not being fulfilled?
Data management is central to the work at Wemove, and everything is tracked. Sure enough, the data showed the gaps.
WeMove started as a third-party vehicle hire company that catered to individuals and consumers. Still, a lot of its requests were coming from companies, especially those in Fast Moving Consumer Goods (FMCG) and Construction. The company decided to explore the B2B option.
Construction comes with certain risks, especially to the vehicles, so it wasn't particularly appealing. FMCG, on the other hand, was a curious case. Bigger, more established logistics companies typically serve them. That these companies were reaching out meant other logistics companies weren't fulfilling their demands.
The team took debt from friends to pilot the FMCG project in January 2020. The goal was to help FMCGs move their products from manufacturing plants around the country to retailers. As of this time, the company already had over 3000 vehicles for hire on its platform.
This pivot would prove invaluable in rescuing the fortunes of the company. It would also prove timely as the covid-19 restrictions that started in March have brought a temporary halt to the regular activities that fuelled revenue. Servicing FMCG brands, allow WeMove to keep earning revenue despite the restrictions.
While working on the FMCG project, the company also explored the option of helping small businesses grow by opening up distribution channels in eastern Nigeria. This pet project took Celestine to the east in February 2020 to study the terrain. He also took the opportunity to study the terrain and meet with potential partners and vehicle owners that could come on the platform.
Unfortunately, the Covid-19 pandemic and resulting lockdown threw a spanner in the works. The project is currently on hold, but there are plans to revisit it soon.
The birth of a new vertical: Rally
Between 2018 and 2019 a lot of requests also came in from Travel and Tours companies. This was one market that the WeMove team had not previously paid attention to. What was more concerning was that many of the requests were getting cancelled abruptly.
The team decided to investigate the issue. After speaking with some tour operators, the problems became apparent. The requests were being cancelled because the companies couldn't get people to fill up their tours. WeMove quickly understood this to be a distribution issue.
Tour companies do most of their marketing in an echo chamber. Many people who can take advantage of the tours are simply unaware. This realisation gave birth to another vertical: Rally by WeMove.
Rally handles distribution and marketing for tour companies. They can list their tours in exchange for a commission. People looking for holiday destinations can also come on the platform and search for ongoing tours all-year-round. Rally also partners with companies to give discounted tours to their staff when they go on leave.
For Celestine, Rally has been a remarkable addition to the WeMove offering. He believes it is a necessary hedge, especially in a climate where government regulations are unpredictable. The crippling of bike-hailing startups in Lagos still leaves a bitter taste in the mouth of many people in the Nigerian tech ecosystem.
Also Read: Lagos bans tricycles and bikes, what's next for bike-hailing startups?
Rally has also opened doors into other African countries for the company. It has entered agreements with multiple South African companies to list tourist trips and events in South Africa. One of its partners is in talks with the government of Cape Coast, South Africa, to use WeMove’s technology to kickstart tourism in the region once things return to normal. There are also ongoing conversations in Rwanda and Kenya — two of Africa's fastest-growing tourism hubs.
Rally has grown so well that the company is now running a boot camp for tour organisers. The bootcamp helps tour operators acquire digital skills that can help them distribute and market their tours better. So far, 435 tour operators have listed, and over 2500 tourists have been served via the platform.
All of these have happened within a year that Covid-19 has decimated the tourism business. As things return to normal, and people begin to travel more often, WeMove expects to serve more customers.
What's next for WeMove?
2020 has been a great year for WeMove. With one more month to go, the company has already recorded $272,000 in revenue — almost 7x the income for last year. The company has also morphed from a vehicle-hire company to a logistics and tourism servicing technology company.
They operate with a small team of just seven members, but the work done has been remarkable. The technology is the most crucial part of the business for them. The tech is split into two categories: Organisation and Data management. Organisation helps the company know what types of vehicles are being requested and manage the scheduling and movement. Data management helped inform the direction to pivot in when it seemed like revenue had plateaued.
Next up, Celestine is looking at expansion. Fundraising plans are underway already as the company looks to spread its wings after rounding off an excellent year.
Right now, the company is building a system where people can invest in proxy-owned trucks. The goal is to create a framework that allows people to earn direct returns from trucks and cars without needing to worry about day-to-day care. It's also entering into protected agreements with companies that require consistent use of trucks and vehicles.
The company also hopes to be able to play in the public sector in the near future. Government policy is something that they believe their data can influence in coming years, especially with regards to trade corridors and what routes would best facilitate them.