Bykea, a four-year-old ride-hailing and delivery service, today has more than 500,000 bikes registered on its platform. It operates in some of Pakistan’s most populated cities, such as Karachi, Lahore and Islamabad. The three cities Bykea operates in have a combined population of 30 million people. Public transportation is underserved in all three cities, but these urban centers drive the economy of the 5th most populous country in the world. Auto-rickshaws are some of the most popular mode of transportation in South Asian nations. Two-wheelers are more popular in Pakistan as motorbikes are the rails for distributors, couriers, e-commerce retailers and restaurants to move goods and collect receivables, almost entirely in cash. There are about 17 million two-wheeler vehicles on the road in the country today, compared to approximately 4 million cars. Bykea leads the two-wheeler ride-hailing market in Pakistan and also operates a logistics delivery business and a financial services business. The startup has partnered with banks to allow customers to pay phone bills and get cash delivered to them. Firms like Bykea are helping transform big societal needs like transportation, logistics and payments through a technology-enabled platform in Pakistan. With around $7 million in Venture Capital funding four years ago, Bykea has now become a generic name for bike-taxi and 30-minute deliveries. Recently, it has raised $13 million in a new financing round led by investment firm Prosus Ventures. It’s the first time Prosus Ventures has invested in a Pakistani startup. Bykea’s existing investors Middle East Venture Partners and Sarmayacar also invested in the round, which brings its total to-date raise to $22 million.
About Bykea
Bykea is an on-demand platform that connects urban Pakistanis for transport, logistics and payment services. The company was founded with a vision to empower millions to connect, communicate and trade. Bykea’s platform is fueled by a network of predominantly part-time drivers ferrying people, parcels and payments on motorbikes. The platform consists of six categories servicing consumers locally; transport or bike-taxi services, instant delivery, supermarket/nearby store concierge services, bill payments and deliveries originated from classified listings. Bykea also provides payment services by offering cash-on-delivery (COD) and cash-in capabilities to billers and leading wallets in the country.
About Prosus
Prosus is a global consumer internet group and one of the largest technology investors in the world. Operating and investing globally in markets with long-term growth potential, Prosus builds leading consumer Internet companies that empower people and enrich communities.
The group is focused on building meaningful businesses in the online classifieds, payments and fintech, and food delivery sectors in markets including India, Russia and Brazil. Through its ventures team investments, in areas including edtech and health, Prosus actively seeks new opportunities to partner with exceptional entrepreneurs who are using technology to address big societal needs.
The new investment comes at a time when Bykea restores the losses incurred by the coronavirus outbreak. As with most other startups in travel business globally, lockdowns meant bad news for Bykea. However, Bykea did not eliminate jobs instead cut several other expenses to navigate through the tough time. It is looking to further expand its financial services business through working with e-commerce giants like Daraz and AliExpress. The startup has been able to out-compete firms like Careem and Uber in Pakistan by offering localized solutions. It remains one of the few internet businesses in the country that supports the Urdu language in its app.
Pakistan is primed to experience extremely strong growth in Internet services over the next decade, with a rapidly increasing middle class. This growth provides immense opportunity for companies like Bykea that are transforming big societal needs like transportation, logistics and payments through a technology-enabled platform. Bykea has already seen impressive traction in the country and with further investment will be able to expand into and grow e-commerce logistics, food, and payment services, in 2021. Bykea offers millions of people the chance to earn an income by tapping into the tremendous opportunity in the country for both transport and hyper-local commerce. Prosus’s investment in Bykea is significant given Pakistan’s nascent venture ecosystem, signaling interest among global investors to invest in high-growth opportunities in emerging markets.
[box type=”note” align=”” class=”” width=””]The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan[/box]