Estonia-based ride-hailing company, Taxify, last week sealed a $175 million investment from Daimler AG, the parent company of Mercedes-Benz, along with European venture capital fund Korelya Capital and TransferWise co-founder TaavetHinrikus.
Uche Okafor, Taxify’s City Manager, in this exclusive interview with BusinessDay’s Private Equity & Fund Raising editor, Lolade Akinmurele, spoke of plans to deploy the funds and gave an evaluation of how its Nigerian market is kicking on.
We combed your website and only found achievement scorecards for South Africa and Kenya. How are you kicking on in Nigeria? How many registered drivers do you have today and how does than compare to your period of inception in 2016? How many clients, trips etc, do you have now and how do these also compare over time?
We have seen tremendous growth since our launch in Nigeria in November of 2016. We started with a few hundred rides and today Lagos and Abuja are top performing Taxify cities. We currently have thousands of registered driver-partners and riders in Nigeria and thousands of trips are made every day in the country. We are very excited by the love Nigeria has shown us and are looking forward to expanding to as many parts of the country that will have us.
Does your newly secured investment put you miles ahead (pun intended) of competition in Nigeria?
Nigeria is already one of our top markets in terms of volume of rides and Taxify already has a substantial market share in Lagos and Abuja. However, the investment will definitely help us further grow the business and solidify our position.
The entire $175mn is unlikely to go to Nigeria alone, but what share is your largest market getting? That is assuming Nigeria is your largest market.
Taxify will use this money to further develop its technology and expand to all bigger cities in Nigeria. Unfortunately, we are not able to disclose an exact share at this point.
What is your take on private equity funds targeting tech firms in Nigeria? 2018 looks to be kicking on well for digital and tech firms whether it’s Cellulant who raised some $47.5 million or the latest- piggy bank.ng which raised $1.1 million. What is the attraction, do you think and what expectations do you have for full-year in terms of fund raising activity?
The attraction is simple – Nigeria on a whole has a very large market size and more interestingly a booming tech start-up scene. Venture capitalists from across the world are noticing this wave and it is no surprise that Nigerian entrepreneurs across industries from fintech to retail have attracted capital inflow. We expect this trend to continue and for ride-hailing companies being the future of transportation to benefit from this.
Taxify CEO and co-founder Markus Villig said last month that “We go into markets where ride-sharing is already a proven concept… we come in and we improve on that by having just cheaper commissions and giving more back to the riders and drivers. We don’t want to get into these regulatory troubles and be wasting millions in lobby battles.” How is he finding the Nigerian terrain?
We’ve been very careful in picking the cities around the world that have a proven need for ridesharing, e.g. Lagos, where urban transport is a big problem. We’ve been able to couple that with smart use of technology and a lean approach to marketing which can be a huge cost. This allows us pass savings on to our customers in the form of better service and competitive prices.