The East African region has attracted several foreign investors and multinationals to set up a base and get a piece of the pie. Known as Africa’s technology hub, its economic progress, and innovative prowess is what has led companies like Uber and Kenya’s own Little Ride to become successful. The American ride-sharing company is not the only Silicon Valley-based company to take root, the fintech company Branch has penetrated the market successfully, becoming the number one loan app in Kenya. Having disbursed small loans amounting to a sum worth over KES 3 Billion.
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New to the market, is Estonia’s Taxify who have descended on the region and hit the ground running. While also being a ride-sharing company like Uber and Lyft, the company has embraced the local culture to get an edge. They have added to their services the ‘boda-boda’ service, which translates to a motorbike, to pick clients. Being a popular means of transport in the East African region, Kenya has been the first on their list to relay these services. As a result, Taxify has record increased revenue with this approach with many boda-boda drivers registering to take on the services.
Taxify aims to inject new funding, an unknown figure amounting to millions of euros to expand their market share. Ranking third in the region, the newly pumped investment should enable them to open up offices in the region in popular urban centers. This investment strategy will be made over the next five years with a strategy focused on ‘motorized rickshaw and motorcycles.’ This changes the game for them, as they have discovered the area in which they are already winning and have decided to maximize on it.
Karl Aru, Taxify’s expansion manager says the Estonian-based company is focused on providing appropriate means of transport for the local customers in East Africa. Since Africa has more than 40 pc of its population in the urban centers, it has allowed for car sharing companies to grow on the continent. It has also inspired local competition. Taxify currently has operations on Mombasa, Nairobi, Dar es Salaam, Kampala and the newly opened office in Mwanza, Tanzania.
Taxify recently raised its valuation to $1 billion, after receiving funding to the tune of $127 million from global investors. With nearly half of its business being in Africa, the company with 5 million users is looking into expanding into Ethiopia and other East African countries to take the competition head-on. Today, Africa is the host of nearly sixty ride-sharing companies, present in over 21 countries. The competition for market share is high and rising constantly. However, a healthy capital funding and the latest technology have seen uber and taxify become the two dominant foreign ride-sharing companies.
Taxify became popular soon after launching the app in the region by reducing the commission paid to drivers to 15pc as compared to the usual 25pc. Making it a popular choice for users as it was cheaper, however, this did not hold for long. Local competition is making it a tough act to follow, and eventually, fewer drivers want to work with the company due to the low rates. With their new prospect on motorcycles, they could surpass their competition.
In Kenya alone, in 2017 the motorcycle sector in Kenya brought in revenues worth KES 600million daily, and an annual average of $2.1 billion dollars. This is more than the country’s telecom giant Safaricom’s total revenues. This is what makes the sector a hotcake for taxify and other eager entrepreneurs. Mondo by Dubai has also made an effort in the Kenyan market. Becoming a significant competitor.
In sub-Saharan Africa, the ride-sharing services have increased due to the growth potential of the continent. Max.ng and GoKADA in Nigeria have taken off, as well as littleBoda in Uganda and SafeMoto in Rwanda.
Source: Venture Africa