Hopes to launch new cash-to-digital service
Bykea, Pakistan’s first motorbike ride-sharing technology startup, is looking to close series B of $15 million in the first quarter of 2020, as the startup enters micropayments, its CEO Muneeb Maayr told Samaa Digital.
“The new financing will be used for expansion in the ride-sharing, driver network and express delivery, including cash-to-digital services for consumers and businesses in urban areas of Pakistan,” Maayr said at its semi-formal environment head office in Karachi.
The main economy is running on micropayments, Maayr said. “We have enabled technology for the masses perhaps not for the bottom of the pyramid but for the middle class.” He said they were trying to solve micropayments in real time and under Rs7,000. “With the new service, it will be seamless in a few months,” he added.
“Bykea has 60,000 to 70,000 bookings per day, in a year’s time we should be around 200,000.
In one day if we can make 10,000 payment transactions, that facilitate trade within a city that’ll be fantastic, so after one year, in one day we should be around 100,000 financial payments,” the 40-year-old CEO said.
Launched in 2016 in Karachi, Bykea—which comes from Buy Kia—is an all-in-one app for transportation and delivery services, with payments to be included soon. It was founded by Maayr, who co-founded Daraz, now an Alibaba company. He was also director for operations at SNL Pakistan, now S&P Global, one of the largest IT exporters from Pakistan.
The tech startup raised $5.7 million in Series A investment in May – the first round of financing after seed money. Its user app already boasts over two million downloads while the one for partners has 200,000 motorbike owners across Karachi, Rawalpindi/Islamabad and Lahore.
Bykea is not adding bikes to the roads, rather it says, if you work at some office or factory during that period, you can give your bike to your jobless friend or cousin, so he can earn from it during that period. “That’s why it’s a utilitarian product,” Maayr said.
The development comes at a time when Pakistan’s startup market is making global headlines. Earlier this year, a Thomson Reuters Foundation experts’ poll on the best countries for social entrepreneurship ranked Pakistan among the top three.
Last month, Airlift, another promising Pakistani startup closed $12 million in series A funding led by Silicon Valley-based Venture Capital firm First Round Capital—the company known for early bets on Uber and Square.
“First Round has not invested in Asia in more than a decade, not in China nor in India nor in Indonesia,” Aatif Awan, who is an investor in Airlift, wrote on his blog, calling Pakistani startups the next big thing.
Pakistan’s tragedy is that masses cannot search and type; it’s not like Iran where everyone types in Persian or Saudi Arabia where everyone is searching by typing in their own language.
The challenge was how to build technology for a broader Pakistani demography given that English is a big hurdle. People use voice notes in WhatsApp, because typing is a bit difficult and it is in another language.
So, we went to build an app in Urdu, and for nearly three years we have run an app in Urdu, with around 200,000 downloads, the CEO said.
Economics of bikes
Pakistan has over 17 million bikes and around 40 million to 50 million smartphones. In the beginning people were skeptical about who would take a bike taxi. It might work for deliveries but not otherwise.
A five-year-old bike cost around $150 and a five-year old car is around $5,000. If you make one dollar per hour on Bykea and work for 8 hours, that comes to around $8.
If you work for 20 days, it becomes $160, in 20 days you have recovered the cost of the bike.
But if have a car and its fare is $2.5 or $3, it will take over a year to recover the money, the CEO explained.
Referring to other ride-hailing services, he said reason why these people came to markets like Egypt and Pakistan is that they wanted to show growth before an IPO. They have come to these emerging markets to show hyper growth.
So, the premise was that the economics for a common Pakistani, you can cater to 15m to 20m with cars, but to cater to 200 million people, it will have to be a bike.
“And bike economics makes sense,” the CEO asserted.
The writer is the Pakistan correspondent for Reuters News. He tweets at @syedraza_hassan. He previously worked at Dawn and The News.