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Tag Archives Startups

The Race for Electric Boda Bodas in Kenya

Posted on 4 min read

Twenty years ago, motorcycles were a preserve for the rich in Kenya. In rural areas, a few teachers owned them, and agricultural extension officers used to ride them as they went for farm visits. They were not common, and were never a public means of transport.

This all changed when President Mwai Kibaki’s government implemented some policies that lowered the buying price of motorcycles, enabling many people to acquire them. Many youths jumped into the opportunity and motorcycles, popularly known as Boda Bodas in East Africa, went mainstream in Kenya.

Since then, motorcycles are a preferred means of transport in all parts of Kenya. As of 2020, there were more than 1.4 million boda boda riders in Kenya, doing a total of 22 million rides per day. The total revenue from the industry is KShs 980 million per day.

The Energy Part

One of the associated industries that has gained from the growth of boda boda is the energy sector, where it is estimated that the riders spend about 25% of their income on fuel. This would translate to about KShs 250 million spent every day on fuel.

It is this lucrative industry that is attracting different players with electric bikes. Traditionally, motorcycles run on petroleum fuel which has a lot of negative effects on the environment. Besides, the cost of repair and maintenance is high due to the many parts involved using Internal Combustion Engines.

With electric bikes, boda boda operators can save on fuel costs, spare parts, serving, and reduce their Carbon dioxide emissions.

Startups in the Electric Motorcyle Business in Kenya

Here are few startups that are seeking a piece of cake in lucrative electric boda boda sector.

Ampersand

Ampersand is an electric motorbike company which has been operating in Rwanda, but now expanding to other countries in East Africa. In April 2021, Ampersand secured a funding of 3.5 million USD from the Ecosystem Integrity Fund (EIF) to fund its expansion. Already, the company has advertised for various positions as it plans its entry into the Kenyan market.

Ampersand assembles its electric motorcycles and finances riders to acquire the bikers, as well as providing swap stations where riders come to swap batteries once charge is depleted.

Opibus

Opibus is a Kenyan based electric mobility start-up that has successfully converted Internal Combustion Engine vehicles to electric. One of the products that they are building is an electric motorcycle that is locally designed in Kenya.

Opibus’ electric motorcycle comes with a 2.9kWh battery with an extra slot for an optional second battery, and is available for preorder in Kenya, with delivery dates starting late 2021.

Ecobodaa

Ecobodaa is a Kenyan startup that is slowly disrupting the boda boda industry in Kenya. The startup providers riders with electric motorbikes that are designed and assembled in Kenya, and supports them to succeed as boda boda riders. With its unique ride-to-own financing model, riders get to own their bikes after sometime.

Ecobodaa launched a successful pilot program in 2020 before beginning their expansion. The startup has secured funding from Persistent Energy Capital in April 2021 to help accelerate its growth in Kenya.

Mazi mobility

Mazi mobility is another Kenyan startup that is assembling electric motorbikes in Kenya. Founded in 2020, Mazi mobility seeks to enable boda boda riders in Kenya to acquire electric bikes and provides battery swapping stations where riders will quickly swap their batteries quickly and efficiently.

Kiri EV

Founded in 2020, Kiri EV manufactures electric motorcycles in Kenya. It also provides charging stations, as well as battery swap stations. The firm has been in pilot phase but is now taking preorders from the public.

Fika mobility

Fika mobility wants Kenyans to transition to electric motorcycles by offering them affordable electric motorcycles and providing battery swap station for easy charging.

ARC Ride

Arc Ride is a British startup that offering electric motorcycles in East Africa. The startup is focusing on assembling electric motorbikes, establishing solar charging networks, assisting in ownership and offering fleet management services.

Stima

STIMA enables boda boda riders to acquire electric motorcycles and offers a battery swapping network to enable faster and easy battery swap.

Uber

In May 2021, Uber announced the launch of electric boda bodas in Kenya on its platform. This would allow riders offering the Uberboda, Uber connect and Uber Eats to run the service on electric motorcycles.

Bolt

Bolt followed Uber’s move and unveiled electric motorcycles in Kenya in June 2021. The electric motorbikes are in use by Bolt Food Carriers who do food delivery and will be expanded into the ride hailing business.

Others

There are some startups that are solely dedicated to providing charging infrastructure for electric vehicles. These include Chaji Energy and E-safiri.

UNEP’s Electric Mobility Programme has also added a voice in the race to electrify the boda boda industry in Kenya. Earlier in 2021, UNEP donated 99 electric bikes that are in use in Kenya in Karura Forest, Kenya Power and Lighting company, Power Hive and Kisumu County.

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NopeaRide is Making Clean Mobility a Reality in Kenya

Posted on 3 min read

One of the major obstacles to making environmentally conscious decisions is the immediate cost that is involved in many cases. It costs one convenience when you have to choose sort out their garbage and dispose it in the right way. It is inconvenient when for people when a country bans single use plastic bags, like Kenya did in 2017.

This is the case for electric vehicles in Kenya, where adoption has majorly been by enthusiasts and people who want to make a statement. This is because the supporting infrastructure is still in its nascent stage, and you will have some trouble charging your car somewhere between Nairobi and Mombasa.

However, an unlikely disruption is happening. NopeaRide is a ride hailing company that is unique and a first mover, because it runs 100% electric cars in Nairobi. That in itself is something good, but there is more to it.

Price Sensitive Market

Many Kenyans are very price sensitive, and the choice of a taxi service is often informed by the fare that they will be charged. This is where NopeaRide gains an unlikely competitive advantage.

NopeaRide charges lower prices than other ride hailing service, allowing one to save money and enjoy a clean, green ride. If in doubt, just check the price estimates from point A to B and compare it with the prices on NopeaRide app, using similar categories of vehicles with the same safety rating.

One would expect that an electric taxi charges you more, but it is actually the opposite. NopeaRide has the price advantage.

Better Terms for Drivers

Electric vehicles have another advantage that drivers and owners can enjoy. They are easier to maintain because they have fewer moving parts compared to internal combustion engines. An example of this is in use of electric motorcycles for bodaboda, where it was found that riders reduced their maintenance cost by 90%.

But the main catch for electric taxis on NopeaRide is that drivers earn more, and spend virtually nothing on fuel. Drivers earn 50% more than those in other ride hailing platforms. For fuel, drivers can recharge their cars for free at the various recharge stations within the city.

Nairobi is Ideal for Electric Taxis

Why would an electric ride hailing choose to launch in Nairobi and not any other place? One of the reasons for this is the ideal conditions offered by the city.

EkoRent founder Juha Suojanen says that Nairobi has some large population of 4.3 million living in area that is roughly 30 km by 30 km. This puts any point within the range of all electric vehicles, and makes it easy to create an effective charging network. Besides, and ordinary driver in Nairobi also drives for only short distances in a day, hence electric cars can be ideal.

Kenya is already a global leader in using cleaner energy, with 93 of electricity being generated from renewable sources. Perhaps, Nairobi should take the challenge and go all green. NopeaRide has already set the foundation for that.

Next time you are going out, trying an electric taxi.

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Scaling up lessons from M-PESA

Posted on 3 min read

Building a good product is hard. Getting people to use the good product you have built is even harder. I have seen the careers of many developers come to an end because they thought that having the perfect product would mean mass adoption, only to realize that no one was interested in their apps. Why does this happen? Because it takes more than a good product to sell. It takes skills and effort to market, it takes marketing research, it takes money to advertise, and sometimes, it takes chance.

M-PESA was launched in Kenya at just the right time. First, it was a perfect product for a market where sending money to someone in the next town was as unreliable and as slow as sending a letter. M-PESA promised to change all that, and they did exactly that. But how did it get mass adoption in Kenya? Safaricom had made the onboarding process very easy, where one needed just a National Identification card. They also made it a big show, where everybody got to hear about it and curiosity was rife. With a good budget and advertising team, it was possible to enroll some people. However, past that Safaricom needed two things:

  • A critical mass of people to register for M-PESA
  • M-PESA agents being available everywhere

Safaricom had two genius techniques to achieve these two.

Getting the masses to register for M-PESA

Safaricom allowed one to send money to both the registered and unregistered M-PESA users. It was cheap to send money to registered M-PESA users, but expensive to send to money to people to people who had not registered for M-PESA. The implication of this was that before you sent money to any person, you had to confirm if they were registered or not. If not, you would ask them to find someone nearby who was already registered and send to them instead. This idea of receiving money through a proxy was not appealing, and this would be enough to make someone to register.

With that, Safaricom turned M-PESA users to M-PESA evangelists.

Getting agents in every corner

The success of M-PESA was pegged on availability of agents in all places. This is currently the reason why other mobile money platforms have failed to gain traction in Kenya, because you cannot find their agents. With M-PESA, you probably need to turn around to find an agent, that is if there is no M-PESA agent right in front of you.

How did M-PESA manage to get so many agents? The first thing was the revenue sharing model. When one sends money through M-PESA, they are charged some transaction fee. This fee is shared between Safaricom and the mobile money agents involved. For this reason, people realized that they could actually make money by becoming M-PESA agents, and soon every shop and stall added M-PESA agency services on the sideline.
Safaricom followed up by providing the necessary branding merchandise. An M-PESA agency outlet looked cool. With that, they now needed to vet who wanted to be an agent, as too many people were trying to jump into the train.

Conclusion

It was not that easy, and Vodafone cannot replicate the same fete elsewhere. The most sure way to know if your start-up or business will scale is simply to try it out.

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