Gokada, Nigeria’s on-demand motorcycle taxi startup, has raised $5.3 million in Series A funding to expand its business throughout the country.
Based in Lagos, Gokada has provided almost one million rides since its founding in February 2018 through a network of 1,000 bikes. Customers can use the app to schedule a motorcycle or hail one of the green-helmeted riders as they drive through the streets. Motorbike rides are cheaper than buses and cabs, and drivers can navigate through congested traffic much more easily.
Gokada is different from other ride-sharing services in that they do not take a share of the drivers’ daily earnings. Instead, the company charges drivers a flat rate equal to $8 a day to use the platform. Applicants are required to pass an extensive psychometric and driving test and are extensively trained in defensive driving behaviour to protect themselves and the riders before they can represent the company. Once hired, drivers have access to health services, recreational services and pension plans. The company plans to generate more revenue by building a commercial network around the rider community.
“We don’t do anything with the fares,” Fahim Saleh, Gokada’s CEO and co-founder, told TechCrunch. “We want to create an Amazon Prime-type membership…and ecosystem around the driver where we’re going to provide them more and more services, such as motorcycle insurance, maintenance, personal life-insurance and micro-finance loans.”
The company’s motorcycles are all above 200 cc, meaning they can legally travel on all major roads, bridges and highways, unlike typical motorbikes in the country, also known as “okadas.” Furthermore, after a year with the company, drivers have the option to own their bikes.
Competition has been increasing in the on-demand transport industry through the region. In April 2018, Uber launched a two-wheel transport option in East Africa. Bolt, previously Taxify, also decided to launch a motorcycle taxi service in Kenya. Nevertheless, Saleh is optimistic that his customers will remain loyal to the platform and not seek out competitors’ services. Prior to founding Gokada, Saleh founded and exited Pathao, a bicycle, car, and motorcycle transportation company based in his home country of Bangladesh.
“Gokada is more than happy with Nigeria as it is a massive market,” he said, as quoted by Tech Next. “There are so many problems to solve and we think we have some great solutions for them. We aim to increase our fleet by multiples and start introducing new complementary services in 2019. We are very aware of competition coming in but we believe we’ve developed a good understanding of the market and how to cater to it. Competition will have to start from scratch and many are distracted with other regions.”
For Gokada’s Series A funding, Rise Capital led the investment, accompanied by Adventure Capital, IC Global Partners, and First Midwest Group. Ayodeji Adewunmi, Nigerian investor and founder of the job-searching portal Jobberman, is also planning to join the company as co-CEO.
With the funding, Gokada plans to extend its services to its drivers as well as increase the company’s fleet and ride volume.
“We’re 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,” Saleh explained.” We’re going to start a Gokada club in each of the cities with a restaurant where drivers can relax, and we’ll experiment with a Gokada Shop, where drivers can get things they need on a regular basis, such as plantains, yams and rice.”
