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African super-app Gozem, which offers users access to transportation, delivery, and payment services recently confirmed that it has closed its Series A round, picking up $5 million from investors from across four continents and different industry verticals.

Gozem has been primarily targeting Francophone Africa, despite being based in Singapore, and has managed to attract attention from some big hitters in the world of finance including AAIC, TransferTo, Momentum Ventures, Innoport Ventures, CMC Ventures, and Liil Ventures.

Speaking to Auto Futures, co-founder and co-CEO, Raphael Dana, says that the company hopes to use this funding to expand the company’s reach to Cameroon, as well as to accelerate its vehicle financing loan book with the help of credit investors.

Gozem had me very curious from the get-go. For starters, why is a Singapore-based company building a super-app for West and Central Africa? That’s when Dana explained that he and his fellow co-CEO, Gregory Costamagna, were previously in the consulting space, and specialised in helping tech companies penetrate the Asian and African markets.

They were both first-hand witnesses of the rise of super-apps such as Grab and Gojek. These companies started with motorcycle ride-hailing but have since rapidly expanded into other services vying to become integral parts of their customers’ lives.

Dana and Costamagna wanted to emulate this success specifically for the African market, which already had thousands of mototaxis, the right telecom infrastructure, but no tech companies. And once their third co-founder, Emeka Ajene, who previously worked at Uber, joined from Nigeria, the trio launched Gozem from Togo in November 2018. Since then, Gozem has expanded from Benin, Gabon and, now, to their fourth location, Cameroon.

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A Focus on Francophone Africa

While the pandemic has been harsh on ride-hailing companies around the world, Gozem seems to have ridden the storm almost unscathed.

“Covid-19 arrived in the beginning of 2020, as we all remember,” says Dana.

“That’s when we realised, ‘Oops, there’s curfew everywhere.’ We were shutting down in many countries or were only allowed to operate just for some specific hours in some others, and so that’s when we said to the team, ‘Let’s focus on building the super-app now’.”

“The timing was great because we had less volume on our hands. We worked on building our delivery technology for e-commerce, food delivery, and courier. We also took this time to focus on building our financing business to help our drivers get cheaper financing by partnering with banks. And while we already had a wallet, we moved to licence our wallet to allow for peer-to-peer transactions, merchant payments, remittance, and more. With all these new verticals open, we opened in Gabon. Finally, at the end of last year, we acquired Delivroum, a food delivery company in Togo.”

Through the pandemic, Gozem has grown its team to 250 people, expanded to four verticals – transport, e-commerce delivery, financing of vehicles and payments – and expanded its reach to four markets, two in Central Africa and two in West Africa, and now it has picked up $5 million in funding.

Quite an impressive list of achievements, especially when it was experiencing low volumes in its main line of business.

“At the beginning, we didn’t have the resources or the mindset to say, ‘Let’s move to all the other verticals’, but Covid-19 had accelerated this and, all-in-all, the pandemic has been quite good for us,” says Dana.

That Gozem exclusively operates in Francophone African is no accident.

“Our strategy was to look at all of the Francophone market. That’s around 10 countries and 250 million people,” says Dana.

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“We are going to start looking like a Gojek of Western and Central Africa.”

What’s really interesting is that Gozem’s end game is to be in the Fintech realm, specifically payments and lending.

“A big part of the Francophone zone, almost two-thirds of it, has a single currency called CFA franc (XAF). This money is pegged to the Euro, which means that the currency exchange is fixed to the Euro. This negates a lot of the FX risk, which exists in countries such as Nigeria and Kenya, where you have massive inflation and depreciation of the money. This becomes a big issue when you are doing International lending and capital transfer investments for all those countries.”

While currency concerns are somewhat negated by the CFA franc, mobility infrastructure remains a problem.

“The countries we are operating in, you won’t really see public buses or trains,” explains Dana.

“This market is really about single transportation, like mototaxis, which is very informal. People use taxis, but they’re slightly different from what we’re used to. You have big cars that ply on certain routes, and they’ll usually have about 8 passengers. If you have to get from point A to C, you’ll have to go from A to B first and get another form of transport to get from B to C. As I said, all of this is very informal. The vehicles are in really bad shape, which is why nothing is reliable or scalable. This is why this is a massive market and we’re seeing some big transportation companies in the world investing in Gozem.

“We are in these 250 million-strong markets and those companies realise that this is a big opportunity. We need to understand how we are going to address this, but we are building a lot of data, which is key to understanding how to better address the market and how we can come up with a multi-level model to provide the right solution to our customers.”

Coming back to the recent funding round, I was keen to know what this funding would be used for and some of Gozem’s plans for the future.

“We just closed a $5 million Series A and had raised $7 million earlier of our convertible notes of seed money, so we have raised a total of $12 million,” says Dana.

“On the mobility front, our ride-hailing service covers mototaxis, tricycles, tuk-tuks, regular taxis and premium taxis as of now. We’re now planning on running a pilot for school transportation, which might be a mix of cars and mini-buses. We are also hoping to enter a ride-sharing, multi-passenger space, where we are creating a dynamic route for taxis that multiple passengers can book at the same time.”

According to Dana, Gozem isn’t looking beyond Africa.

“Africa is big enough. With close to 1.4 billion people, it is a sizeable market with a scope of a lot of things to do. We want to stay extremely focused on the African continent, even more Western and Central Africa. Phase one of our growth plan is to target all the 44 countries that speak French. We’ll then look at Nigeria, Kenya and other countries. Of course, we’ll assess this on the go, but this is the plan for now and we are not changing. Our focus is set on targeting all of the 250 million people in our market.”

“We are entering Cameron, which is a massive market. In Q1 of 2022, we’re going to open in the Democratic Republic of the Congo (DRC), and by the end of 2022, we are going to add four more countries – Ivory Coast, Senegal, Mali and Burkina Faso,” says Dana.

“With the addition of these locations, in addition to the ones that we’re already active in, we’re going to open ourselves to 240 million people in West and Central Africa, where we are going to fully deploy our super-app in four verticals – transport, delivery, finance and wallet. That’s the master plan, and we’ve almost no competition. At that moment we are going to start looking like a Gojek of Western and Central Africa,” concludes Dana.

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