Bike hailing startup, Max has closed a new round of funding. The startup recently secured $7 million funding from investors through a Series A round ($6 million) and grants ($1 million). Kenyan venture firm Novastar Ventures led the round. Other investors include Breakthrough Energy Ventures, Zrosk Investment Management and Alitheia Capital. Japanese bike manufacturer, Yamaha also participated in the round.
Max plans to use the new funds to expand across different markets and into new transport verticals, one of which would see the introduction of electric vehicles/motorbikes (EVs).
After originally starting out as a delivery startup that uses motorcycles (okadas) to move goods, Max pivoted to ride hailing and is now one of the biggest startups in the Nigerian market.
With its new funding, Max.ng has now raised at least $9 million since it launched in 2015. The new funding comes at a crucial time for the company.
Expansion Now Key To Max’s Resurgence
Since the start of the year, competition in the ride hailing business has intensified. Despite having first mover advantage, Max appears to have lost its dominance. For instance, while Max now has over 1,000 riders, Gokada, a startup two years younger than Max, now boasts similar numbers. This slip can be attributed to two things. First, the nascent nature of the ride hailing market in Nigeria means nobody is really on top. Second is due to intense competition from new entrants like Gokada and the Opera funded ORide.
But Max is taking big steps to retake its lead.
Last week, the company revealed expansion plans across both Nigeria and Africa. Currently in Lagos and two other locations in Nigeria, the company plans to launch in a fourth city. It is expanding internationally. The company disclosed it wants to expand to 10 African countries beginning with Ghana and Ivory Coast. Expansion into both countries will be completed by the end of 2019 says Adetayo Bamiduro, Max’s co-founder.
But this is just one part of Max’s quick growth plan.
Electric Motorbikes and Water Transport Top of Max’s Growth Plans
Buoyed by its new funding, the company wants to introduce electric motorcycles into the market.
“We’re piloting electric motorcycles in partnership with EV manufacturers and working with grid operators across Nigeria to deploy charging stations,” said Bertrand Njoya, CFO at the startup told TechCrunch.
But it’s not just EVs that may be coming. Max has revealed it wants to enter the water transportation business. The startup follows rival Gokada which announced a similar venture called GBoats in early June. Although no bike hailing startup is an original mover in the water transportation business, their interest in this area is testament to the transportation problems in Nigeria generally, and Lagos in particular. Solving these challenges could be quite profitable for the winners of this new transport war, hence the influx of funding into the sector.
This level of funding will intensify competition in the market. For perspective, the other competitors also have powerful backers or advantages. For instance, ORide is backed by Opera’s $40 million fund for Nigeria. Gokada currently leads the market and recently raised over $5 million funding, while also bringing in experienced hands to manage its growth. And SafeBoda, the Kenyan company, is backed by the humongous German insurance company, Allianz Group and Indonesia’s GoJek.
The market looks giddy right now. And this has attracted big transport companies like Uber and Taxify who have also launched two-wheel transport products.
Yet, for all this interest, market players have remained mum about revenue, making it difficult to judge their substantive progress.It’s early days for this new crop of transport players but we’re keen to see how they, and the market, develop.