On the 16th of December 2021, Google, the world’s largest search engine, revealed that it had made its first investment from its Africa Investment Fund. SafeBoda is a Ugandan bike hailing service that connects customers with nearby riders.
The investment comes just two months after Alphabet CEO Sundar Pichai announced the company’s plans to invest $1 billion in “tech-led projects” over the next five years during the Google for Africa event in October, including a $50 million Africa Investment Fund aimed at early-and growth-stage African firms.
Prior to launching the fund, Google assisted startups in their journeys through its ‘Google for Startups Accelerator Africa’ program. The accelerator program has provided equity-free coaching, mentoring, and resources to over 80 startup companies ranging from seed to Series A. They’ve raised more than $100 million in venture capital between them. Google also announced the Black Founders Fund, a $3 million non-dilutive fund that will invest in 50 companies each year.
The funding from Google will aid SafeBoda’s progress in Uganda and Nigeria, allowing the company to expand its transportation-focused app to include new payment and financial services for its growing number of customers, including passengers, drivers, and merchants.
“SafeBoda is thrilled to welcome Google to their community and to continue to promote innovation in informal transportation and payments in the Boda (motorcycle taxi driver in East Africa) or okada (West Africa) industry,” one of the co-founders, Ricky Rapa Thomson, stated. He went on to say “As a former Kampala Boda driver, I know that we are the lifeblood of Africa’s cities and the engine that propels economic prosperity. SafeBoda is pleased that large global organizations such as Google appreciate the importance of assisting start-ups pursuing these goals”.
The company, founded in 2015 by Alastair Sussock, Ricky Rapa Thomson, and Maxime Dieudonne, operates similarly to other bike-hailing startups such as ORide, Gokada, and Max.ng. Customers can order transportation through the safeboda app from anywhere in the country. With a significant presence in Uganda and Kenya, Nigeria is the company’s third market, with a population of over 200 million people.
In 2019, SafeBoda indicated a prospective expansion into Nigeria. All of the aforementioned ride-hailing firms were already operational, and SafeBoda appeared to be a latecomer. Despite the schedule and the competition, the team knew it was going to succeed, according to Babajide Duroshola, the country head for SafeBoda in Nigeria. “Coming to Nigeria and doing the same thing we did in Kampala, which is to grow swiftly and make SafeBoda a household name, was a no-brainer decision for us.”
Since its founding, SafeBoda has rarely acknowledged any of its funding rounds, but sources familiar with the company’s operations believe it has raised more than $20 million. GoVentures of Gojek, Allianz X, Transsion Holdings, Beenext, Unbound, and Justin Kan are among its investors.
Nitin Gajria, Managing Director of Google in Africa, stated, “I am excited about our first investment from the $50 million Africa Investment Fund that we announced two months ago.” This is part of our ongoing support for African tech startups. No one, in my opinion, is better suited to addressing Africa’s most pressing issues than the continent’s young developers and entrepreneurs. We are very excited to announce future investments in additional startups.
Over 250,000 rides had been conducted, and thousands of drivers had been onboarded by SafeBoda, and a local approach and community development were critical to the company’s seemingly small but exponential growth in a sector no one had examined.
A localization play was one of the things that set us apart from all the other guys in the market. “The fact that we were able to contact and hire these guys who were okada drivers directly off the streets to join our operations team was extremely important,” Duroshola made known in a statement.
SafeBoda’s growth in Uganda and Nigeria has made it one of Sub-Saharan Africa’s most active players. With over 25,000 registered riders, the company has done over 35 million rides in both nations. It also claims to have a market share of more than 80% in both nations.
Despite its success, SafeBoda had a hiccup in its third market, Kenya, which it expanded into before heading to Nigeria. The company had boarded over 1,500 passengers in less than a year, but it was not growing at the expected rate. The pandemic exposed SafeBoda’s issues, and passengers’ dissatisfaction with pricing caused a commotion that forced the company out of Kenya.
Apart from rider issues, Co-founder, Alastair Sussock pointed out that Kenya’s motorcycle taxi industry was not as dense as Uganda’s or Nigeria’s, which he believes led to the exodus.
“In Kenya, we were the market leader, and we were doing the most rides.” However, in comparison to Uganda, it was still fairly tiny in terms of volume. We also recognized what Nigeria’s potential was, something we didn’t know at the time. So it was evident that Kenya, while highly developed in terms of technology and per capita, was difficult to scale in terms of motorbike taxi service,” he explained.
SafeBoda currently has no stiff competition in Uganda and Nigeria’s bike-hailing battles. The company’s biggest issue is the offline market, which sees over 1.5 million rides done every day in Uganda alone. SafeBoda’s strategy is to convert a larger portion of this customer base to its existing online market share. In Uganda, it also hopes to expand into P2P, merchant, and bill payments, as well as boost its on-demand business.
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