Nigerian transport startup, PlentyWaka has raised $300,000 in pre-seed funding to extend its services to Abuja, Nigeria’s capital territory.
Launched in the second half of 2019, under CrowdyVest Holdings and Farmcrowdy, Plentywaka has recorded unprecedented growth even amidst the strains of coronavirus pandemic that restricted movement in the second half of the year. The startup has built a customer-base of over 40,000 clients, recording over 61% increase in app downloads, 34% increase in ride bookings, and 50% growth in the number of daily rides.
With its plan to go beyond Lagos, the company welcomed the pre-seed funding from EMFATO, Microtraction and Niche Capital.
The managing director and co-founder, Johnny Enagwolor said the rapid growth of Plentywaka has fascinated and lured the investors.
“Securing investment and expanding into Abuja within our first year, in the midst of a pandemic, speaks volumes of the demand for the service we provide. We are excited to have investment partners on board that see and believe in our vision.
“An efficient transport system is fundamental to the prosperity of any city and we believe safe, convenient and comfortable travel should not just be for the few, but for everyone. Plentywaka in Abuja brings us closer to transforming transport in Nigeria, one state at a time,” he said.
Plentywaka is using the e-hailing system to facilitate bus-based transportation, and has already recorded over 100,000 rides. The growth is believed to have been spurred by Lagos State’s motorcycle ban that has forced thousands of commuters to use alternate transportation. With the progress recorded so far, the startup is confident that its services will be expanded to other states in Nigeria, and hopes to secure more funding.
Dayo Kolewo, partner at Microtraction said Plentywaka has shown tremendous growth to make them proud partners.
“We are glad to be partnering with a very strong team that is passionate about providing convenience, safety, and comfort to everyday commuters. The distressful and uneasy experience by the majority of these commuters, especially in large cities is evident. We are backing the Plentywaka team to change that experience for commuters progressively by creating a transport system that is efficient,” he said.
In June, Plentywaka delved into logistics as part of its plan to widen its range of services.
The startup is looking for driver partners who will get their vehicles on board its platform through its Vehicle Partnership Scheme. Plentywaka is offering a week free ride to Abuja commuters.
However, while the startup has recorded significant growth in a short while due to the ban on motorbike ride-hailing services in Lagos, it is facing its own threat. The Lagos State government is reportedly planning to introduce regulations for the app-based transport sector that many fear would cripple startups like Plentywaka.
Part of the new regulation is the requirement of operational license purchase, at the cost of N25 million for companies with more than 1,000 registered vehicles.
Technext reported that e-hailing companies will subsequently be required to pay license renewal sums between N5 million and N10 million annually. Under the new regulation, the companies are required to remit 10% of every trip earned as service charge.
Part of the regulatory policy said the capacity of vehicles should not be less than 1.3cc and must be brand new or not less than three years old.
With the new regulations due to be implemented, e-hailing startups like Plentywaka will find it hard to cope. Already, regulatory policies by the Lagos State government have put many transport startups out of business, and pushed others to other states where the pasture is far from green. Those who dared to stay had to pivot to logistics, which is not a safe haven because the regulator, the Ministry of Communication and Digital Economy, also developed new regulatory policies that stakeholders said would cripple the sector.
Majority of the driver-partners on Plentywaka’s platform don’t have the spec of vehicles stipulated by the new rules. Therefore, Plentwaka’s survival play may lie in other states where there are more friendly policies.