Nigeria: Ride-Hailing Startup MAX.ng Raises $7M Round To Go Electric
The competition just got hotter now. Nigerian ride-hailing startup MAX.ng is not taking the recent triumph of its competitor Gokada for granted. The Nigerian motorcycle transit startup has raised a $7 million funding round led by Novastar Ventures, with the participation of Japanese manufacturer Yamaha. This is the 8th largest funding so far in 2019 by any African startup.
Here Is The Deal
- The $7 million new funding came from Novastar Ventures, with the participation of Japanese manufacturer Yamaha.
- Breakthrough Energy Ventures, Zrosk Investment Management, and Alitheia Capital joined Novastar Ventures and Yamaha in the $7 million round. The new funding takes MAX’s total funding to $9 million.
- This move by Yamaha is the second in less than a year in an emerging market ride-hail company.
- Just last December, the Japanese company invested $150 million in Grab, a Southeast Asian two and four-wheel on-demand transit company.
- Yamaha’s investment in MAX indicates global interest in Africa’s two-wheel ride-hail space. Overall, the motorcycle taxi market is becoming a significant sub-sector on the continent’s mobility startup landscape.
- Co-founded in 2015 by MIT Sloan alumni Adetayo Bamiduro and Chinedu Azodah, MAX has completed over 1 million trips and is one of the largest delivery partners in West Africa for Jumia — the e-commerce unicorn that recently listed on the NYSE.
- Based in Lagos, the startup’s app-based platform coordinates motorcycle taxi and delivery services for individuals and businesses. Six-million of the investment is in Series A capital followed by $1 million in grants.
New Funds, Bold Moves
Things are going to be interesting. MAX.ng is going for a shocker, a history-breaking feat: electric motorcycles, backed by the new funding. This could be a first in Africa’s growing motorcycle ride-hail market, should this happen. The new funding will go into Electric Vehicles development.
“We’re piloting electric motorcycles in partnership with EV manufacturers and working with grid operators across Nigeria to deploy charging stations,” MAX.ng CFO Guy-Bertrand Njoya said.
MAX has an extended menu for the round, including the company’s payment infrastructure.
“We intend to invest massively in our technology capabilities,”Njoja said.
The startup will also expand to 10 cities in West Africa (starting in Ghana and Ivory Coast) and add new vehicle classes — including watercraft and three-wheeled tuk-tuk taxis.
MAX’s current fleet consists primarily of Yamaha Crux Rev and Indian manufacturer Bajaj’s Pulsar motorcycles.
This Round Of Funding Will Also Fuel Massive Research
Yamaha, the lead investor is looking at connecting the startup to market research and Yamaha’s existing Nigeria operations.
“We want to work with good entrepreneurs in Africa to develop new business in Africa,” Shoji Shiraishi of Yamaha Motor Company’s New Venture Business Development Section told TechCrunch.
“We really want to understand local needs for motorcycles and…to support [MAX] expanding their business,” he said.
He added that Yamaha sells and manufactures motorcycles in Nigeria
The Competition Is On And Is Steaming
Just last month MAX competitor Gokada (also based in Lagos) raised a $5.3 round and announced it would expand in East Africa. Rwanda has motorbike taxi startups SafeMotos and Yegomoto. Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya in 2018 and recently raised a Series B round, co-led by the venture arms of Germany’s Allianz and Indonesia’s Go-Jek.
On the question of how MAX will compete in a market with more players, co-founder Chinedu Azodoh named diversification and satisfying drivers.
“We’re a very driver-centric business and at the end of the day the driver is where the business is at,” he said, highlighting the ability of MAX’s platform to deliver market-share to those drivers.
“[Also]Strategic for us is making sure we’re doing the right thing at the right time,” he said, indicating the company has already scaled up and scaled down certain service offerings in response to market needs.
“If we find that maybe there’s something else we’re missing out on, we’re happy to jump into that,” Azohdo said.
Also on the big edge, the startup has over others, Azodoh says MAX’s mix of business delivery and personal transit offers an advantage over competitors. He noted that MAX.ng has local developer team and is always looking at new revenue opportunities.
Electric Motorcycles Powered By Renewable Energy
Max.ng is banking on this, at last as the ultimate winner.
“The economics are promising and could offer significant value to the drivers and end-users,” MAX CFO Guy-Bertrand Njoya said
Motorcycle transit ventures are vying to digitize a share of Africa’s boda-boda and Okada markets (the name for motorcycle taxis in East and West Africa) — representing a collective revenue pool of $4 billion (now) that’s expected to double by 2021, per a TechSci study.
Uber began offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) started motorcycle taxi service in Kenya.
With electric motorcycle taxis in African cities powered by renewable energy becoming a reality, a new stage is set for the continent’s current position in the transformation of global mobility.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.