KARACHI: Bykea, a leading Pakistani ride-sharing and on-demand delivery platform, on Monday announced it had secured $10 million investment from its existing backers to cater to rising demand for online services in the South Asian nation of 220 million.
The company said it plans to use the capital to enhance and extend its leading position in mobility and fulfillment services for consumers and enterprises, including food and e-commerce deliveries, as well as leveraging its fleet for unique fintech use cases, like cash on delivery (COD), cash-pickup or verification services.
Bykea’s fresh funding comes at a time when three other startups, Careem, SWVL and Truk It In, either scaled down their services or laid off workforce due to global and domestic economic downturns.
“In these testing times this is a great vote of confidence,” Rafiq Malik, chief operating officer (COO) of Bykea, told Arab News on Monday.
“The capital will be used to enhance our leading position in the Bike Taxi, Delivery and fulfilment of services while providing livelihood to hundreds of thousands of driver partners.”
Bykea investors include Prosus Ventures, MEVP, Sarmayacar, Tharros, and Ithaca Capital. In the last two years, the company has recorded an exponential growth in the three cities it operates in, namely Karachi, Lahore and Islamabad.
Bykea founder Muneeb Maayr said the fresh funding would help serve the company’s five million customers and provide opportunities to over 60,000 riders.
“With this fresh investment, we are excited to continue to serve our 5 million base of customers. We continue to provide them with an affordable and on-demand method of moving people, money, and parcels, while simultaneously providing livelihoods for over sixty thousand driver partners every month,” Maayr said in a statement.
Jonas Eichhorst, Bykea executive chairman, said these were exciting times of high growth for the startup and they were grateful for the continued support of existing backers.
“With 1.7 million monthly active users (MAUs), we see an enormous opportunity to serve the middle-class by offering easy, affordable, and convenient transport and logistics solutions,” Eichhorst said.
Maayr said the company was particularly proud of being able to consistently deliver on three key ingredients, including rapid growth that was five times its pre-pandemic scale, profitability in mobility, and the versatility of the largest motorbike fleet in the country.
“This round reflects existing investors’ continued belief in Bykea’s execution excellence and attractive growth profile, underpinned by a focus on sustainable unit economics and second to none capital efficiency,” Rabeel Warraich, founder of the Sarmayacar venture capital firm, said.
The economic downturn has hit the Pakistani startup scene, where a combination of investor exuberance, pandemic-induced digital adoption, an improved regulatory environment and interest from foreign investors drove VC funding to a record high of $350 million last year — five times the amount raised in 2020 and double the total investment received in the last six years.
Funds continued to flow into Pakistan till the first quarter of 2022, with startups raising around $176.6 million, according to data from Invest2Innovate and Alpha Beta Core.
But reality is setting in now, with several notable players announcing layoffs recently and scaling down operations.
