When the coronavirus outbreak spread earlier this year, it brought the movement of people to a standstill. Flights were stopped, borders sealed and roads barricaded to make sure the virus didn’t spread any further. In a matter of weeks, airline stocks were down by more than half.
In Pakistan, too, the effect was disproportionately felt by ride-hailing companies, which saw their operations completely shut and volumes fall to an absolute zero with just one state order. Just before those days, Bykea’s Pitchbook page (a private market data portal) showed about a $13 million round, only to be taken down.
As pillion-riding was prohibited, the mobility startup’s bread and butter was taken away. Temporarily, Bykea tried to leverage whatever it could by aiding the government in intracity logistics and cashing in on a sudden demand for deliveries. Even after some ease in movement restrictions, things didn’t improve much by mid-May. The company was still at five per cent of its pre-pandemic values.
‘We are not backing off in the bike taxi category. We can even outspend (Uber and Careem) on this,’ says Bykea founder and CEO Muneeb Maayr
This wave of gloom in the sector was quite global in nature and saw Uber lay off over 10pc of its staff while Careem made around 30pc workforce redundant. Meanwhile, Bykea kept waiting and tried to cut costs wherever it could.
“We stopped all our marketing activities during that period and got extensions from our international vendors like Facebook and Google and altogether cut down some 65pc of the expenses,” says Bykea’s founder and CEO Muneeb Maayr.
According to him, the startup had recovered the entirety of revenues by September and the transactions by November. In December, the two numbers reached 2x and 1.25x of their pre-pandemic levels.
Driving this growth was the core bike taxis. When asked about any surge in the delivery business — as we saw in the wake of the pandemic — Mr Maayr says that trend was more pronounced in the upper-middle segments, which were mostly catered to by the likes of Foodpanda or courier companies while their market was predominantly small shopkeepers.
In September, the company announced a Series B round worth $13m, which had earlier been disrupted, bringing in the much sought-after investor, Prosus (Naspers). And now, the plan is to go all-out.
That means it will have to fight it out with the bigger fish — Uber and Careem — which also operate in the bike business and have been expanding their deliveries as well. However, Mr Maayr is very clear on his priorities. “We are not backing off in the bike taxi category and can even outspend them on this if need be.”
The startup plans to spend at least a third of the newly raised capital on marketing over the next year or two, and make sure it comes on top of others in the bike taxi business. According to the CEO, Bykea currently has 50pc market share in Karachi, Lahore and Islamabad combined, with a clear leadership position in the coastal city. It’s virtually absent in Punjab’s provincial capital and that’s where it will face the toughest time.
Bykea plans to do that in two ways: usual online marketing through platforms like Facebook and Google, and the franchise model. The latter is basically sort of a laissez faire system where the startup allots a certain budget to small entrepreneurs who set up shop and then act as its local marketeers or representatives.
“Almost 100pc of our supply is now coming through the franchise channel whereas its contribution towards demand is roughly a quarter,” he says. Those two currently stand 30,000 riders and 300,000 monthly active users of the app.
None of this is to suggest that all their energies are on the bike taxis. Broadly in the sector, there has been a lot of talk about super-apps, with the likes of Gojek and Grab having pulled it off quite successfully. Mr Maayr is also bullish on the same. In fact, he has been a strong proponent of this concept and that hyperlocal marketplace for a long time now.
To get there, the startup had launched a cash collection service a while ago and has a more refined version planned in 2021. “It would be an invoice generation type platform where you can pay for services by Visa/Mastercard, book a rider to handle cash or even get ATM on wheels,” he said.
