In many large cities across Africa, motorcycle taxis are as common as yellow cabs in New York.
That includes Lagos, Nigeria, where ride-hail startupย Gokadaย has raised a $5.3 million Series A round to grow its two-wheel transit business.
Gokada has trained and on-boarded more than 1,000 motorcycles and their pilots on its app that connects commuters to moto-taxis and the companyโs signature green,ย DOTโ approved helmets.
The startup has completed nearly 1 million rides since it was co-founded in 2018 byย Fahim Salehย ย โ a Bangladeshi entrepreneur who previously founded and exitedย Pathao, a motorcycle, bicycle and car transportation company.
For Gokadaโs Series A,ย Rise Capital ledย the investment, joined byย Adventure Capital,ย IC Global Partnersย and Illinois-basedย First Midwest Group. Coinciding with the round, Nigerian investor andย Jobbermanย founder Ayodeji Adewunmi will join Gokada as co-CEO.
Gokada will use the financing to increase its fleet and ride volume while developing a network to offer goods and services to its drivers. โWeโre going to start a Gokada club in each of the cities with a restaurant where drivers can relax, and weโll experiment with a Gokada Shop, where drivers can get things they need on a regular basis, such as plantains, yams and rice,โ Saleh told TechCrunch.
The startup differs from other ride-hail ventures in that it doesnโt split fare revenue with drivers. Gokada charges drivers a flat-fee of 3,000 Nigerian Naira a day (around $8) to work on their platform. The company is looking to generate a larger share of its revenue from building a commercial network around its rider community.
โWe donโt do anything with the fares. We want to create an Amazon Prime-type membershipโฆand ecosystem around the driver where weโre going to provide them more and more services, such as motorcycle insurance, maintenance, personal life-insurance and micro-finance loans,โ Saleh said.
โWeโre trying to provide a network of great services for our drivers that makes them stick with us, and not necessarily see a reason to switch to other platforms,โ said Saleh.
Competition among those platforms is heating up, as global players enter Africaโs motorcycle taxi market and local startups raise VC and expand to new countries.
In Nigeria, Gokada faces a competitor in localย startup MAX.ng, which offers mobile-based passenger and logistics delivery services.
Overall, Africaโs motorcycle taxi market is becoming a significant sub-sector in the continentโs e-transport startup landscape. Two-wheel transit startups are vying to digitize a share of Africaโs boda-boda and Okada markets (the name for motorcycle taxis in East and West Africa) โ representing a collective revenue pool of $4 billion and expected to double to $9 billion by 2021, according to aย TechSci study.
The appeal to passengers is the lower cost of motorbike transit compared to buses or cabs ($1.85 is Okada’s average fare) and the ability of two-wheelers to cut through the heavy congestion in cities such as Lagos and Nairobi.
A notable facet of motorcycle ride-hail companies in Africa is better organizing space with a reputation for being somewhat chaotic and downright dangerous.
For Gokada that includes training courses and certification of riders, the ability to track trips and safety stats from the app, and quality control for motorcycles โ something thatโs been lacking in East and West Africaโs non-digital moto-taxi space.
The companyโs rider program offers a way for drivers to buy, own and maintain their motorcycles as they earn. Gokada has entered into a partnership with Indian motorcycle maker TVS Motors to create a custom version of the companyโsย TVS Apache motorcyclesย for Gokada drivers.
Gokada is also experimenting with adding sensors to its fleet to better track safety standards. โWeโre looking at seat sensors and another GPS sensor to track things like โdid this driver add more than one passenger on the bikeโ and all that data will feed back into our servers,โ Saleh said.
The company wonโt enter any new countries in Africa in the near future. โWe plan to expand all over Nigeria. We think itโs a large enough market for now,โ said Saleh. Nigeria is Africaโs most populous nation (190 million) and the largest economy.
