KARACHI: Three years ago, Muneeb Maayr had what would turn out to be a $5.7 million idea: to launch a technology app that could transform two of the biggest assets of lower and middle income Pakistanis — the smartphone and the motorcycle — into a source of income.
Bykea, an Urdu-language bike-hailing and logistics app, was thus born in December 2016. Less than three years after its launch, the company has bagged $5.7 million in a Series A funding round from Pakistan’s first venture capital fund Sarmayacar and institutional investors from South East Asia and the Middle East.
The funding round is the largest ever in Pakistani startup history and a sign of Bykea’s growing popularity in one of the world’s largest markets for motorcycles.
“Smartphones and motorcycles are often the only valuable assets of low income persons and we thought to convert them into income generating assets through engaging them with Bykea,” Maayr, 40, told Arab News in an exclusive interview.
Maayr is a pioneer in Pakistan’s e-commerce landscape. In 2012, he founded Daraz.pk, the country’s largest online marketplace and retailer, now acquired by Chinese e-commerce giant Alibaba. He was also Director of Operations for seven years at SNL Pakistan, now S&P Global, one of the largest IT exporters from Pakistan.
With Bykea, Maayr said, his aim was “to facilitate more and more people through easy public transportation in less time.”
“Now we will use the [$5.7 million] financing to expand our network, and further simplify the Urdu app for the common person, and make it easier to use for semi or illiterate people,” he said.
Bykea has to date been installed by 2 million users and employs a network of over 200,000 delivery partners, or motorbike drivers. Around 85 percent of the company’s operations — which include ride sharing and deliveries, couriers, bill payment services, wanted ads, classified ads and ticketing help — are run in Pakistan’s financial hub and largest city of Karachi.
The idea behind forming Bykea, Maayr said, was to tap into the largest segments of Pakistani society, lower and middle income citizens, who could not afford cars and were to a large extent not literate in English. Bykea’s Urdu-language app would do just that, enabling a crowdsourced network of motorbike owners to transport people and parcels, thereby supplementing their incomes while also delivering cost effective logistics solutions.
Pakistan, a nation of 208 million people, is the world’s fifth largest market for motorcycles after China, India, Indonesia and Vietnam. With 7,500 new motorcycles being sold every day, Pakistan is also among the world’s fastest growing two-wheeler markets, according to 2018 figures from the Bureau of Statistics.
“There are 3 million motorcycles registered in Karachi city alone while countrywide registrations stands at 30 million,” Mohammad Sabir Shaikh, chairman of the Association of Pakistan Motorcycle Assemblers (APMA), told Arab News.
“We are not even covering one percent of the total market share,” Maayr said.
Pakistani tech startups like Bykea have also gained from the country’s expanding Internet penetration and infrastructure. Pakistan’s mobile Internet users as a percentage of the population were recorded at 21 percent at the end of January 2019, as per a Global Digital Report released by We are Social and Hootsuite. According to the Pakistan Telecommunications Authority, the country’s tele-density is 75.8 percent or 159 million cellular subscribers, 66 million 3G/4G users and 68 million broadband users.
With literacy at around 60 percent and a majority of Pakistanis only marginally fluent in English, Maayr thought it would be best to launch an Urdu app. He says what makes his service unique from ride-hailing apps like Careem and Uber, which also offer motorbike rides, was precisely that the app was in a local language, making communication much easier between customers and drivers, as well as rendering the app more accessible to common Pakistanis in general.
E-commerce is a rapidly growing industry in Pakistan, with sales of local and international e-commerce merchants doubling to Rs40 billion in 2018 from Rs20.7 billion in 2017, according to central bank data which only covers payments made through digital channels and not cash-on-delivery, a popular method of payment in Pakistan. If non-digital modes of payment are taken into account, figures for total e-commerce activity in 2017 and 2018 may have touched Rs 51.8 billion and Rs 99.3 billion respectively, the State Bank of Pakistan said.
“Pakistan can experience an increase in its gross domestic product by a cumulative 7 percent (roughly $36 billion) and create around four million new jobs during 2016- 2025 via an increase in the use of digital financial services alone,” the central bank said in its annual report for fiscal year 2017-18.
Bykea’s funding announcement follows a series of customer launches, including a collaboration with the country’s leading telecom network Jazz, to connect customers with drivers using a simple dial in mobile number 0307-1234567. In addition, the Company has received grants from USAID’s Small & Medium Enterprises Development Authority to help create jobs in the hospitality sector and the Mahvash & Jehangir Siddiqui Foundation to provide short term lending to enable motorbike owner operators with income opportunities.
Going forward, Bykea intends to use funds from the new raise to continue to focus on increasing its driver network and providing new members income generating opportunities in the transport, delivery and e-commerce space.
“After regularly visiting Pakistan over the past 3 years, the tremendous potential of the country is obvious to me,” said Singapore-based Jonas Eichhorst, who will join the company’s board as part of the $5.7 million funding transaction. “Bykea and its team are in a great position to play a leading role not only in advancing the nascent startup sector but can also become a local champion within the overall economy.”