Nigeria-based mobility-as-a-service platform Treepz (formerly Plentywaka) has acquired Ugabus, a Ugandan bus company that aggregates inter-city bus operators. While the terms of the deal were not disclosed, Onyeka Akumah, CEO and co-founder of Treepz, told TechCrunch that the acquisition was funded with a recent $1.5 million raise that acted as an extension to a previous seed round.
The seed extension, which came from new investors including Japan-based Uncovered Fund, Dubai-based Blanford Capital and Jonomi Capital, and Egypt-based Jedar Capital, adds onto an August raise of $1.3 million, funding Treepz used to purchase Stabus, a Ghanian bus company, to expand across the continent. Treepz is closing the seed round at $2.8 million.
The acquisition, which will see Treepz fully acquire all of Ugabus' operations and staff, marks Treepz's first entry into the East African market. Ugabus, which will be renamed Treepz Uganda on December 1, currently has 70% of all the country's bus operators on its platform, which includes around 50,000 customers that use the service to travel between cities in Uganda, according to Treepz.
"We'll be able to service most of the major cities in Uganda, but the good thing about East Africa is they have very seamless borders between the countries, so it's easy to move from Uganda to Rwanda, Uganda to Tanzania, Tanzania to Burundi, and so forth," Akumah told TechCrunch. "The plan is to extend into Tanzania and Burundi first. Those are places we will pay attention to next year. We are also really interested in Ethiopia. So the same thing we were doing with Ghana, across Ghana to Togo and Benin from Nigeria for the West African region. So next year, we will consolidate on our positions on East Africa and West Africa and start collapsing into on in sub-Saharan Africa."
In Lagos, Treepz's hometown, the startup's business model consists of three verticals. The main service, "Daily Treepz," is like Uber for minivans and buses. It offers riders in a city fixed daily routes from bus stop to bus stop, allowing them to reserve seats using the app and pay via a digital wallet system. "Travel Treepz" is the startup's intercity bus service, which allows Treepz to act as an aggregator for other bus companies, similar to what Ugabus's model is. Finally, Treepz has recently introduced corporate bookings, providing transportation services for businesses.
When Treepz Uganda launches this week, it'll start with intercity and corporate services.
"We will look at the opportunity of doing Daily Treepz there in the future, but for now it's easier for us to launch there with what we already have and what the team is already used to," said Akumah.
Intracity trips account for the majority of Treepz customers, said Akumah, because it's a daily service that people use twice a day, five days per week, spending an average of $2 to $3 per day.
"Bus operators are starting to see us as a technology partner against competition," said Akumah. "The Treepz technology as an inventory management system can now be used by the bus operators to power their different systems. And that ... turns out to be a tremendous opportunity for growth for us. So we see a future where as we aggregate bus operators for city to city, and we also work with bus operators within cities. It just grows the numbers over time around the transactions that happen on our platform."
In addition to the seed funding, Treepz also recently received funds from Google's African Investment Fund, which the startup will use to aggressively expand its on-demand ride-sharing and intercity bus ticketing services in Africa. The company had previously outlined plans to expand as far as Toronto, where Treepz has backing after being accepted into Techstars Toronto, but is focusing instead on helping digitize and modernize the African transportation ecosystem.
"Treepz is building the most important mobility infrastructure in Africa's megacities," Takuma Terakubo, CEO and general partner of Uncovered Fund, said in a statement. "The development of public transportation is essential in African countries where urbanization is advancing."