After securing $31 million in Series B funding, Nigerian mobility tech startup Metro Africa Xpress Inc. (MAX) plans to expand into more African markets as it works to formalize the continent’s transportation sector.
The startup told TechCrunch that the funding will be used to expand into Ghana and Egypt by the end of the first quarter of 2022, as well as other markets in Francophone, East, and Southern Africa by the end of the same year. Over the next two years, the funds will also be used to extend vehicle financing credit to over 100,000 drivers.
MAX began in 2015 as a delivery startup that used motorcycles to fulfill customer orders before expanding into ride-hailing and, later, vehicle subscription and financing services based on data from its first services.
The startup launched vehicle financing in 2018, and CFO Guy-Bertrand Njoya told TechCrunch that in just over two years, the churn rate among drivers affiliated with them has dropped to “close to zero.”
“We spent time understanding drivers’ operations, and it became clear to us that the majority of them do not own the vehicles they use,” Njoya explained.
“It became clear that the fundamental problem that drivers face is consistent vehicle access.” And it was then that we realized that if we are to be successful in addressing the continent’s mobility challenge, we must first address the issue of vehicle access.”
MAX’s commercial bank partners are now extending vehicle purchase loans to drivers, based on credit risk assessment data provided by the mobility company.
MAX intends to build electric vehicle infrastructure in its new markets as part of its service portfolio, with the goal of introducing EVs to its emerging clientele.
“It is yet another milestone in our journey to make mobility safe, affordable, accessible, and sustainable through the deployment of high-performance technologies and operators.” “We will be able to transform the lives of hundreds of thousands of drivers across the continent, accelerate international expansion, and continue our pioneering initiatives in the mobility space thanks to this investment,” said MAX co-founder and CEO Adetayo Bamiduro. Chinedu Azodoh is the other co-founder of the company.
Providing solutions to mobility challenges has been at the heart of MAX’s operations, so the next puzzle it wanted to solve was that of increasing driver earnings while lowering their operating costs.
The founders quickly realized that introducing electric vehicles would be the logical next step, and MAX began their electric mobility journey in 2019. Currently, the company offers two-, three-, and four-wheeler EVs to drivers through various leasing and financing options.
“It’s an extra option that we wanted to give to the drivers because what they care about most is making a decent living through increased income.” “For us, electric mobility will be a significant driver of that goal because EVs are now more cost-effective than their gas equivalents,” Njoya said.
MAX currently designs and manufactures its own electric motorcycle line. Njoya stated that in order to deliver their EVs, they collaborate with partners across the ecosystem, including Yamaha, a leading motorcycle manufacturer.
“We collaborate with Yamaha on driver access to vehicles as well as driver access to finance.” “As a testament to the success of our work and partnership, Yamaha today established a dedicated driver vehicle financing entity for Africa in light of the work that we’ve been doing with them over the last couple of years,” Njoya said.
The most recent funding round was co-led by Lightrock, a global private equity platform that is making its first investment in the African mobility space, and Global Ventures, an international venture capital firm based in the UAE. Existing investors Novastar Ventures and Proparco, the French development finance institution, also participated in the round through their Digital Africa initiative.
According to Njoya, the startup’s goal is to become the preferred vehicle subscription and financial services platform for millions of transport operators across the continent. They recently collaborated with the Estonian ride-hailing company Bolt on a lease-to-own agreement that will allow 10,000 drivers on the platform in Nigeria to acquire energy-efficient vehicles.