South African metered cab service, Zebra Cabs has raised $21.5 million in funding from Futuregrowth Asset Management company. The money will be used to finance Zebra Cab’s expansion into other South African cities, mainly Johannesburg.
The investment has been earmarked for expansion purposes over a two-year period. Mark Herskovits, the Capital Markets Director of Zebra Cab’s parent company, SA Taxi, said, “We will consider seeking additional funding sooner if required, but we first want to build scale in the key area of Johannesburg to achieve critical mass before expanding operations to Cape Town and Durban. Our long-term goal is to have 3,000 Zebra Cabs on the road by 2020.”
Zebra Cabs entered the South African market in early 2011 and it’s humble fleet has grown to over 200 metered cabs operating in Gauteng province of South Africa. It was acquired by South African minibus taxi financier, SA Taxi, in 2015 when the company wanted to expand its operations and also use its successful minibus taxi business model to “revive the floundering metered taxi cab industry” in South Africa.
Futuregrowth will also partner with SA Taxi to offer vehicle financing opportunities to Zebra Cabs’ owner-driver who do not have a credit record. This will enable entrepreneurs that couldn’t access vehicle financing through traditional means to buy and own a metered taxi along with other support services they will need in their taxi businesses.
The credit extension will be viewed as a small business loan rather than a personal loan. “This differentiates us from the vanilla financing options offered through banks, which focus mainly on the creditworthiness of the individual. This often precludes previously disadvantaged individuals from accessing the finance needed to build a profitable small business,” says Herskovits.
Zebra Cabs has improved over the years from a traditional curbside taxi service to include other booking options via calls, online or through their mobile app. Payment options now include cash, card or mobile e-wallet. This has sparked many comparisons between it and ride-hailing giant Uber. It is frequently called Uber’s rival in SA.
Herskovits maintains that Zebra Cabs’ varying payment options and customer base differentiate it from Uber. He said the company has partnered with corporates in Johannesburg as their exclusive transport provider to secure its presence in a “big market within which Uber can’t compete.”