There is a major shift: transportation startups are raising tons of money right now in Africa. Gokada raised $5.3 million few weeks ago, and has now added boats in its business. Today, we are learning that Max .ng, a motorbike ride-hailing startup, has raised up to $7 million. As that happens, ORide from Opera, has $100 million to dip from as they work to fix the logistics friction in Nigeria. These companies are overlaying technology on what has been with us – informal motorcycle taxis – and they hope to “win market share by offering trained, accountable drivers and the convenience of booking rides through a mobile app”, as Reuters notes.
Nigeria’s Max.ng recently raised between $5 million – $7 million according to an interview with Reuters. The motorbike taxi startup will use the funds to expand into Ghana and Ivory Coast later this year. Max.ng started its ride-hailing service in 2017 and completed 200,000 rides in May. The company is looking to complete 2 million rides by the middle of 2020. Max.ng is the oldest motorbike taxi startup in the country but it faces competition from new entrants including Gokada, Safeboda, Oride by OPay and a few more foreign companies looking to set up shop. (TC Daily).
Zido which I hold shares focuses on keke – three wheelers – for the same reason noted by Reuters: “Africa offers huge potential for motorcycle ride-hailing firms due to low personal car ownership, rapidly expanding populations and a lack of efficient mass transport systems in fast-growing cities that are clogged with cars.” There is innovation in the broad transportation space, not just in Africa, but also in U.S. and beyond: Uber is now offering helicopters. Yes, hail a helicopter and Uber helicopter will answer; I will be waiting for that one in Lagos, fiercely urgently!
While limited core infrastructures are being built by these startups, technology can use better planning algorithms to bring efficiencies in the transportation system. We will enjoy those productivity improvements until they hit the ceiling of diminishing returns. By then, governments can rise to provide better infrastructures that will drive long-term sustained transportation efficiency in Nigeria especially with the understanding that rural urban migration continues to skyrocket. But right now, appreciate the startups; they are doing the best they can.
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