Karachi-based bike ride-hailing service Bykea has done a great job in the past and now the company has secured $13 million in series B funding which will further cushion the company to expand its operations to tier two cities in Pakistan.
Series B or the second round of fundraising brings the total money raised by the five-year-old company to $22 million. Prosus Ventures, which invested for the first time in a Pakistani startup, led the funding, according to a TechCrunch report. Middle East Venture Partners and Sarmayacar, which already have stakes in the company, also poured money into it during series B funding.
Pakistan’s homegrown startup, Bykea accounts for more than half of the bike ride market with more than two-thirds of its business coming from Karachi alone. Bykea is the only app in Urdu that Pakistan’s middle class uses for affordable transport, the company says.
The money will be used to expand operations beyond the existing business in Karachi, Lahore, and Rawalpindi. Bykea has partnered with banks for micropayment services, such as fund transfers and bill payments. The company leads in the bike-ride segment where it also offers delivery services. It has 30,000 riders on board, a majority of drivers work part-time.
The funding was secured earlier and announced in July but didn’t materialize because investors were concerned about the ban on pillion riding, which 90% of Bykea’s business depends on.
The Sindh government had restricted Bykea’s services as part of a lockdown strategy to contain the spread of the coronavirus pandemic. It caused losses to many businesses, including Bykea. Earlier, loss in business made the company to cut costs. Bykea used to pay $60,000 per month to Google to use its maps and navigation services but after the lockdown was imposed, the company developed its own navigation system with the help of its riders, according to TechCrunch. It now pays less than a tenth of that amount.