How Bykea turned idle motorbikes into a ride and delivery network

Bykea started with a plain observation about Pakistani cities: millions of people already own a motorbike, and many of them have hours in the day when it sits idle. The Karachi company, founded in 2017, built an app that turns those bikes into taxis and couriers, with an Urdu interface from the start. It had raised $22 million by 2020, lost most of its business to a government ban that summer, and then raised another $10 million in 2022, when it said its mobility business was profitable.

Its founders came from logistics and ecommerce. Muneeb Maayr co founded Daraz, the marketplace Alibaba bought in 2018, and earlier spent seven years as director of operations at SNL Pakistan. Abdul Mannan had worked at Rocket Internet, Rafiq Malik had led operations at TNT in Pakistan and Ishaq Kothawala was an actuary at the insurer Pak Qatar. The first money was an angel round led by Ithaca Capital.

Urdu first, riders from tea stalls

By 2019 Uber and Careem both offered motorbike rides in some Pakistani cities. Bykea’s answer was localisation. The app had Urdu menus and in app messaging with voice notes, and it could be booked by phone call, which reached people without a smartphone. Maayr said the company was working with telecom operators so that feature phones could connect to its network of part time riders.

Supply was the harder problem. Bykea filled it with referrals, in app sign ups and a network of franchises in each city. Middle East Venture Partners, one of its investors, said the company’s recruitment at roadside tea cafes had been “viral in supply uptick”.

In April 2019 Bykea announced a $5.7 million Series A from Sarmayacar, the Pakistan focused fund that was making its first investment after closing a $30 million debut fund. Institutional investors from Southeast Asia and the Middle East took part, and Jonas Eichhorst, a Singapore based investor, joined the board. By MENAbytes’ data it was the largest Series A in Pakistan at that point. The company reported about 1 million bookings a month, more than two million app downloads and more than 200,000 driver partners across Karachi, Lahore, Islamabad and Rawalpindi. In August 2019 Middle East Venture Partners added $2 million.

Maayr put the ambition at bringing 200 million people into technology and economic activity. The Middle East Venture Partners investment was meant to help Bykea work with banks and branchless banking providers to turn cash into digital payments, in a country where about 100 million people are unbanked.

A ban that took most of the business

The pandemic hit a company whose product was often two people on one bike. Provincial bans on pillion riding, which Sindh extended to 15 July 2020, cut straight into it. Bykea representatives met the information technology minister in early July 2020 and told him that 90 percent of its business depended on a passenger on the back seat and that more than two thirds of it came from Karachi.

Maayr said the ban had cut business by 80 to 90 percent and left only deliveries running. He argued that riding pillion was safer during the pandemic than travelling by car, bus or rickshaw, and Usman Chaudhary, the company’s vice president, said the ban had harmed thousands of people who earned a living from bike ride hailing. Bykea officials also told the minister that investors were reluctant to back a sector facing repeated bans.

A $13 million round that Bykea was negotiating was put on hold in early July 2020. Syed Amin ul Haque, then the federal IT minister, said his ministry had written to the National Command and Operation Center asking it to tell the provinces to lift the restriction. Bykea’s argument was that its riders wore helmets, masks and gloves.

The round came back. In October 2020 Bykea announced $13 million in Series B funding led by Prosus Ventures, the Naspers investment arm, with Middle East Venture Partners and Sarmayacar taking part. That took its total to $22 million. Malik, the chief operating officer, said motorcycle taxis made 80 percent of revenue, that the business had recovered to its pre Covid numbers, and that it handled 50,000 to 60,000 transactions a day in Karachi, Lahore and Islamabad. The company said its active rider fleet peaked above 30,000 that year.

Deliveries and cash as the second leg

Bykea said it would use the Series B to expand into smaller cities and rural areas, since it then operated only in urban Pakistan, and to use its riders across ecommerce logistics, food and payments in 2021. Malik said the company wanted daily transactions to rise three to four times.

The company pointed to the size of the opportunity: about 17 million two wheelers in Pakistan, four times the number of cars. Bykea already let customers pay phone bills and get cash delivered by a rider. Maayr said Bykea was one of the few internet businesses offering an interface in Urdu, and that its edge came from being “highly localized”.

The 2022 round from existing backers

By mid 2022 Pakistani startups were announcing layoffs. Careem, Swvl and Truk It In had all scaled back or cut staff. On 27 June Bykea announced $10 million from its existing investors, among them Prosus Ventures, Middle East Venture Partners, Sarmayacar, Tharros and Ithaca Capital.

Maayr said the company served five million customers and gave more than 60,000 riders work every month. Eichhorst, by then Bykea’s executive chairman, put monthly active users at 1.7 million. Maayr said growth was five times its pre pandemic scale and listed profitability in mobility among its achievements. Malik called the round a vote of confidence in testing times. Rabeel Warraich, founder of Sarmayacar, said it reflected existing investors’ belief in Bykea’s “execution excellence”.

The money was meant to strengthen Bykea’s position in mobility, delivery and fulfilment, including food and ecommerce deliveries, and to support rider livelihoods. The company also planned to use the fleet in fintech jobs such as cash on delivery, cash pickup and verification.